Select and Justify a Market To Enter and do a Launch Plan : A Case Study of MNU Cycle Limited, Bangladesh.
The country’s bicycle industry is growing as an emerging sector by utilising its potentials globally in terms of exports and thus contributing about 19.23 percent in the engineering products exports. Bangladesh mainly exports bicycles to the European Union (EU) market, besides the USA, Canada and some Asian countries. Bangladesh stared exporting bicycles in the year 1995 and it has been growing gradually since then. According to EPB data, Bangladesh presently exports locally manufactured bikes to about 30 countries including the UK, Ireland, Belgium, Germany, Denmark, Austria, Portugal, Holland, Greece, Italy, Belgium, Netherlands, France, Sweden, Switzerland, Australia, Czech Republic, USA ; Canada.The bicycle and bicycle parts exporting industry of the country has emerged very recently. It exported $99.15 million bicycles during the financial year 2015-2016 but in the previous fiscal, it was $126.06 million.EU imposed anti-dumping duties of 30.8 percent on Chinese made bicycles exporters in 1993. It created an opportunity for new investors in other countries including Bangladesh to enter into the lucrative bicycle market in the EU.Bangladesh’s investment opportunities emerged for capturing shares in the EU market after the imposition of anti-dumping duties (AD).The country’s bicycle manufacturing sector is split into two different supply chains – modern export-oriented manufacturers OEM (original equipment manufacturer), and the small-scale cottage bicycle and bicycle parts industry catering exclusively to the local market.These two supply chains operate independently with extremely limited interactions and linkages between the two, owing to differences in market demands.Meghna Group has been playing outstanding role in this industry. Meghna founders had been involved in bicycle and parts trading in the 1960s, manufacturing bicycle spokes in the 1970s and doing bicycle assembly for the local market in the 1980s.After diversifying and becoming a highly successful trading conglomerate, the Meghna Group grew to become the largest bicycle and bicycle parts manufacturer in the country.Foreign Direct Investment (FDI) for the local bicycle industry was very important to the emergence of the bicycle export sector. Malaysian investors were the first to seize the EU market opportunity by establishing the first bicycle exporting firm in Bangladesh in 1995.Meghna Group was the next firm, a domestic trading group, to enter the export-oriented bicycle manufacturing industry. It now has three factories dedicated to the export market as like MTB, City Bikes, Free Style, Trekking, Folding, Beach Cruisers, Road Bikes, Chopper, Tandem etc Types Bicycle and a factory dedicated to bicycle manufacturing for the local market.Earlier, the country had a cottage industry of small-scale bicycle assemblers, parts manufacturers, and retailers in Bongshal market based and their ability was out of the low-quality segment of the market.Many small firms combine parts manufacturing with bicycle assembly and retailing of “complete knock down” (CKD) and “semi knock down” (SKD) kits imported from China and India.Presently, Meghna Group is managing three bicycle manufacturing units for international market; Transworld Bicycle Co. Ltd, Uniglory Cycle Industries Ltd, and M;U Cycles Ltd, Md. Hasibuzzaman Hasib, Head of Oparetions, Meghna Group told daily sun. Transworld Bicycle Co Limited (TWBCL) and Uniglory Cycle Industries Limited (UCIL) are 100 percent export-oriented bicycle manufacturers and they are producing a wide range of bicycles like MTB, Trekking bike, BMX, Road bike, City bike, Chopper bike, and Folding bike.The major importers of TWBC in these countries are Raleigh UK Ltd (UK), Motor + Sport (Ireland), Prestige Rijwielan NV (Belgium), Schalow + Kroh GMBH (Germany), Dansk Supermarked A/S (Deumark), Matra Trading BV. (The Netherland), Moore Large and Co. Ltd. (UK), Direct 365 Ltd (UK) etc.Transworld Bicycle Co Limited (TWBCL) exported 120,248 units of bicycles worth $15.54 million during the financial year 2014-2015. Presently, Uniglory Cycle Industries Limited (UCIL)’s main clients are Avocet sports Ltd, Internet stores, Felt Bicycle, M & F Descheemaeker, Eurotrek, MV sports, Claud butler etc. It exported 161,964 units of bicycle worth $21.21 million during 2014- 2015.These bicycles have received several recognitions National Export Trophies as the highest recognition of export business performance by the government. They also were rewarded Export Excellence Award by HSBC Bank for export performance.Meghna has signed an agreement with ADK to manufacture High End Carbon Bikes in Bangladesh to export to Europe and other parts of the world, said officials. Mahin Cycle Industries Limited another unit of the Meghan Group is also dominating the domestic market, they added. Meghna is operating its local bicycle business through its three wings – CycleLife Exclusive, CycleLife Ltd. and Amin Corporation.Through those wings Meghna is selling different types of bikes for local users across the country with their own brands such as, Prince, Reflex and Veloce. Meghna is also selling Raleigh, Saracen, and other brand bikes under licensing agreement. CycleLife Exclusive outlets specialise on high-end bikes and accessories, along with reputable customer service while CycleLife is selling entry level bikes, they informed. Mahin Cycle Industries Limited (MCIL) is the largest bicycle manufacturing factory in the country for catering to the needs of the domestic people. It is the first bicycle manufacturing company in the country to change the cycle retail landscape both in urban and rural areas.MCIL, with annual capacity of producing 2,50000 units of bicycles, has introduced 4 brands- Raleigh, Prince, Reflex and Hiker with a wide range of bicycles like Mountain bike, BMX bike, Road bike, City bike, Chopper bike. Transworld Bicycle Co. Limited (TWBCL) and Uniglory Cycle Industries Limited (UCIL) are 100% export oriented professional bicycle industry and producing a wide range of bicycle like MTB, Trekking bike, BMX, Road bike, City bike, Chopper bike, Folding bike etc.The major importers of TWBC in these countries are Raleigh UK Ltd. (UK), Motor + Sport (Ireland), Prestige Rijwielan NV (Belgium), Schalow + Kroh GMBH (Germany), Dansk Supermarked A/S (Deumark), Matra Trading BV. (The Netherland), Moore Large and Co. Ltd. (UK), Direct 365 Ltd (UK) etc. Transworld Bicycle Co. Limited (TWBCL) exported 1,20,248 units of bicycles with a value of US $ 15.54 million during the financial year 2014-2015.Presently Uniglory Cycle Industries Limited (UCIL) main clients are Avocet sports Ltd, Internet stores, Felt Bicycle, M & F Descheemaeker, Eurotrek, MV sports, Claud butler etc. It exported 1,61,964 units of bicycle with a value of US $ 21.21 million during 2014- 2015 (FY).The bicycle export units have reached several milestones and received recognition like gold and silver National Export trophies as the highest recognition of export business performance by the government. They also awarded Export excellence Award by HSBC Bank for its export performance.Meghna has signed an agreement with ADK to manufacture High End Carbon Bikes in Bangladesh to export to Europe and other parts of the world.Besides the strength in export, Mahin Cycle Industries Limited another unit of the Meghan group is also dominating in domestic market. Meghna is operating its local bicycle business through its three wings – CycleLife Exclusive, CycleLife Ltd. and Amin Corporation. Through those wins Meghan is selling different types of bikes for local users across the country with their own brands such as, Prince, Reflex and Veloce. Meghna also selling Raleigh, Saracen, and other branded bikes under licensing agreement. CycleLife Exclusive outlets specialize in higher end bikes and accessories, along with reputable customer service and CycleLife is selling entry level bikes. Mahin Cycle Industries Limited (MCIL) is the largest bicycle industry in the country for catering to the needs of the domestic people. It is the first bicycle company to change the cycle retail landscape both in urban and rural areas in the country.
M & U Cycle is one of the biggest cycle exporter in our country. It is a sister concern of Meghna Group. Meghna Group is one of the largest Bangladeshi conglomerates. The industries under this conglomerate include automobile, light engineering (bicycle), cement, packaging, textile etc. Meghna Group was established by Bangladeshi entrepreneur Abdul Khaleque Buiyan. It is Bangladesh’s largest bicycle manufacturer and said to be sold in Bangladesh, as well as in countries like Germany, UK and other parts of Europe. They are one of the top garments manufacturer in Bangladesh exporting to Europe high end fashion brands. They have many units ; different types of Bicycle.
Bicycle manufacturing units :
Transworld Bicycle Co. Ltd.
Uniglory Cycle Industries Ltd.
Mahin Cycle Industries Limited
Bicycle Types :MTB, City bikes, Free style, Trekking, Folding, Beach Cruisers, Road Bikes, Chopper, Tandem etc.
These are the main items that are produced by M;U Cycles limited. The chairman of Meghna group was interviewed. Availability of labour with reasonably low wage and of the latest technology has given Bangladesh a competitive edge over other countries such as China, Taiwan, and Europe in manufacturing bicycles, according to Mizanur Rahman, a former president of Bangladesh Bicycles and Parts Manufacturers and Exporters Association and chairman of Meghna Group.This is clearly an opportunity for us and we should try to exploit the potential by taking necessary preparations and steps,” he said.
In this context, the entrepreneur emphasised the importance of the role of the government in providing infrastructures and land. “We need political stability and policy consistency. Foreigners are ready to join us to make bigger and more plants of bicycles and we can earn higher amount of foreign currency from this growing sector,’ he said. ‘What we need most is the environment, congenial environment for investments and doing business.”
He referred to China’s loss of market and GSP facilities and pointed out that Bangladesh could emerge as a major player in the global bicycle market if necessary steps are taken right now. Local companies are also interested in setting up bicycle plants, he added. Currently, more than 5000 workers are employed in the bicycle factories that export bicycles to different countries. ‘We from Meghna Group started exporting bicycles and others joined us. More can come to the industry and contribute to national development.’
Growth of Cycle In Bangladesh:
Bangladesh started exporting bicycles to the European market in 1999. The following year, the value of the country’s bicycle export stood US$10 million, the figure of a new item in the export basket that only indicated growth potential. A decade later, the annual export of bicycle rose to $105 million. Despite higher growth in export performance in terms of percentage, Dhaka has captured only an insignificant portion of the global bicycle market of $60-plus billion a year.
And rising costs of bicycle manufacturing pushed by wage increase in China has shifted the focus of sourcing of bicycle making to countries like Bangladesh which also has a favourable market access to the European Union (EU).Bangladesh is Europe’s 5th biggest bike supplying country after Taiwan, Cambodia, Philippines and Thailand.
Entrepreneurs say Bangladesh can easily increase its market share in the global bicycle exports by taking domestic preparations given the scope in the Western market. The investors need supports, especially conducive environment for the growth of the sector.
Some European investors are willing to make investments in Bangladesh’s bicycle industry. Sales of bicycles, many of which are imported, in the local market are also on the rise, thanks to an increase in the number of bicycle riders in the country. So, this is high time Bangladesh made its bicycle industry sustainable banking on market prospects at home and abroad.
It was Meghna Group which began exporting bicycle. Now, there are 20 companies that are engaged in making bicycle targeting for the export market and local market. “New investments are coming and even foreigners are interested in setting up plants here,” said Mustafa Ahmed Tanvir, general secretary of Bangladesh Bicycles and Parts Manufacturers and Exporters Association and also managing director of Trans-World Bicycles Limited.
Bangladesh now exports 1.5 million pieces of bicycles every year. ‘Of course, the demand in the global market is much higher and we can take advantage of the market opportunities,’ he added.
Pran-RFL bike is also joining the market. The EU’s new Generalised Scheme of Preferences (GSP) facility which went into force on January 1, 2014, and runs up to December 31, 2016, is ‘the driving force behind’ such initiatives, according to the latest report of the BIKE europe.
Under certain conditions, GSP allows Bangladesh (and Cambodia) to export bicycles, parts & accessories to the EU’s 28 member states without the regular 14% import duty on complete bicycles and 4.7% duty on imported parts and accessories.
Bangladesh is already for some years benefitting from the EU trade incentives that boosted the country’s bicycle and bike products export to the EU market. In the first 10 months of 2013, Bangladesh exported 435,530 bikes to the EU, 7.4% up compared to the same period in 2012.
According to Export Promotion Bureau, the target for exporting bicycle for the current fiscal year has been fixed at Tk 1081 crore as against the previous year’s achievement of exports worth Tk 865 crore. Following the footsteps of Meghna Group’s plant in Gazipur, four other companies set up factories for manufacturing bicycles targeting the export market.
H Bicycles Ltd, Trans-World Bicycles, Siraj Bicycles and a German-Bangladesh joint venture plant were there in the race. They are engaged in producing mountain bike, city bike, freestyle, trekking, folding, beach cruiser and children’s bike. The prices of these varieties of bicycles range between US$80-85 a piece, which is considered highly competitive in the European market and America.
Those who import made-in-Bangladesh bicycles include Relay of England, PMC, Motor and Sports, Aldi of Holland, Bestencritch of Germany, Inter-Bike, M and F of Belgium, C Maker and Formula Cycling Company. China was once, and is still, the dominant player in the global bicycle market as it supplied almost 60% of the bicycles sold worldwide.
However, Beijing is gradually its competitiveness due to rise in wage and other costs of living, many factories including bicycle factories have been closed or relocated to elsewhere. As a result, some of the Western manufacturers got back certain edge over China and they are looking at Bangladesh as a sourcing country.
Accordingly, some European investors expressed their willingness to invest in bicycle industry to take advantage of the market vacuum and GSP facilities in the EU market. This is where Bangladesh has a comparative advantage to raise its market share. With growing exports and sales in the domestic market, Bangladeshi entrepreneurs have the scope to make the bicycle industry more vibrant.
M&U CYCLE is already doing their business for a long time. As I have already mentioned that they started exporting many European countries. Now the target is to enter many niche area. Through careful market research, it is forecasted that M&U CYCLES will be well received. A cohesive marketing strategy will be required to bring the company to where it would like to be in terms of revenue. The company offers a wide range of closeout and other specials of assorted bicycle components and gear to retail bicycle shops.
M&U Cycles has compiled good information regarding their market and the target customers that make up the market.M&U Cycles will leverage this information to better understand who is served, their specific needs, and how M&U Cycles can better serve them.
M&U Cycle is providing retail bicycle shops with a wide assortment of bicycle-related items, including clothing and components significantly discounted from the normal wholesale prices. Wheelie Deals seeks to fulfill the following benefits that are important to its customers.
Selection: A wide selection of components, wheels, clothing, bicycles and accessories will be offered to the customer.
Accessibility: The entire catalog is available to all bicycle shops in the country.
Customer Service: The customer will be impressed with the level of help and attention that they receive in all interactions, whether sales, returns, etc.
Competitive Pricing: Because all of M&U Cycle products are closeouts, specials, etc., they will be better priced than other wholesalers.
The market trend for the last six to nine years has been an erosion of margins for bicycles. Profits are recaptured through higher margins found in accessories and service departments. Because the bicycle shops must rely on accessories and service to generate profit, it makes it increasingly difficult for local shops to compete with the large mail order houses. Consequently, there has been an exodus of customers heading toward the mail order catalogs. It would be quite attractive to the local bicycle shops if they suddenly had the capacity to compete with the mail order houses.
Currently, the industry is served by 10-15 different wholesalers. Each wholesaler has their own niche to some degree, but generally they have a fairly wide product offering. Bicycle retailers in need of parts will contact a distributor and purchase their products from them. Some or most of the wholesalers have a sale or closeout section, but this typically makes up a small percentage of their business.
It is well known that the margins in the retail bicycle industry are small. 30% for the bicycles, 75% for components, and 100% for clothing. Closeouts are a great way to increase store traffic and significantly help out the shop’s bottom line with nice margins.
From 1991-1999 bicycles shops enjoyed growth of up to 11%, primarily from the popularity of mountain bikes. Within the last year and half, sales of mountain bikes have grown flat, decreasing overall bicycle shop growth to 4%. The one saving grace to this predicament is a resurgence of growth for road bicycles.
This recent growth is in part fueled by America’s Lance Armstrong’s domination of professional cycling in the last three years of the Tour de France. What makes this all the more incredible and inspirational is the fact that his first Tour win came two years after recovering from what was thought to be terminal cancer. The other factor that has contributed to the resurgence of road bikes is the increase in bicycle paths and bicycle lanes that has been built within the last several years.
While the retail bicycle industry is not forecasted to grow at the same rates as it did in the early nineties, it is likely to grow around 6% a year for several years. Since the wholesale bicycle industry is so tied together with the retail side, growth rates for the two generally mirror each other.
S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats.
Strengths and weaknesses are internal to the company (think: reputation, patents, location). You can change them over time but not without some work. Opportunities and threats are external (think: suppliers, competitors, prices)—they are out there in the market, happening whether you like it or not. You can’t change them.
The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing M&U Cycles.
Strong relationships with many different manufacturers, often negotiating an exclusive distribution deal with them.
Excellent staff who are well-trained cycling enthusiasts who recognize the need to ensure complete customer satisfaction.
A wide selection of goods.
Biking is a simple, low-impact means of exercise, which people of all ages can enjoy Provides excellent customer service including: bike fittings, training and instruction on proper use, safety tips and repair Sells a wide variety of bicycle accessories and parts
The difficulty of raising visibility among all of the perspective customers.
The nature of the industry which does not have a smooth, constant flow of goods (specials and closeouts).
Predicting what products will sell is difficult and since closeouts by their nature are purchased in big lots, a wrong choice could create a glut of inventory.
M&U Cycle’s business model addresses the problem that the retail industry faces decreasing margins.
The ability to spread fixed costs over a larger area as sales increase, increasing profit margins.
While the bicycle industry is affected to some degree by the circular nature of the economy, bicycle and accessory sales never fall completely flat since there are many people that ride bikes regardless if it is economic boom or bust.
Entry into this market niche from an established distributor, recognizing this is the area for growth in the industry.
A decrease in the willingness for manufacturers to sell their closeouts to retailers via wholesalers, instead selling all of their excess directly to the mail order houses.
Use of Bicycle in Bangladesh is increasing day by day. Different types of bicycle from different brands are available in Bangladesh. Among of them Duranta is on of the popular brand in Bangladesh. Duranta has different model such as Duranta Gladiator, Duranta Daisy, Duranta Extreme, Duranta Camellia, Duranta Camellia Girls, Duranta Extreme 20, Duranta Ryan Boys 20, Duranta Avenger Gents 26, Duranta Daisy Girl 20 Bicycle, Duranta Knight 26 Bicycle, Duranta Rider 26 Bicycle, RFL Duranta Express MTB, RFL Duranta Knight Black, RFL Duranta Recoil 20, Duranta angelina Ladies 26, RFL Duranta Recoil 26, Duranta Classic 28, Duranta Gents Bike Allan Marvel, Duranta Kids Bicycle Pilot, Duranta Mountain Bike Knight, Duranta Mountain Bike Rider, Duranta Mountain Bike Avenger, Duranta Mountain Bike Dola, Duranta Mountain Bike Muscular, Duranta Mountain Bike Inova Alloy, Duranta Mountain Bike Prime Alloy, Duranta Mountain Bike Synergy, Duranta General Bicycle Classic, Duranta General Bicycle Durjoy Single bar, Duranta Junior Bike Dulki, Duranta Junior Bike Energy, Duranta Mountain Bike Gladiator, Duranta Mountain Bike Power, Duranta Allan Furious 700C, Duranta CB Racer Masti Red, in Bangladesh. To get this bicycle, please call to your nearest bicycle shop. They are the biggest Competitor of M&U cycles because they have a wide range of variety and they are selling nationwide.
M&U’s Target Market:
From the previous analysis we have found that M&U CYCLE is selling their cycle worldwide, specially in European countries. As I have been told to select a target market I would like to choose niche areas of our country. Many big cities have many stores of cycle but it is very important for the business to catch every corner of the country. Many people in Bangladesh cannot afford rickshaw and car. Cycle is always the cheap way of transportation. So as we are already serving in the big cities our new target would be to launch for the niche area. Specially bandarban, khagrachori etc. As we are targeting niche marketing our target would be to make the price reasonable. For that reason M&U CYCLES should launch a special line of product with reduced price and more durability.
Most of the cycle prices starts from 5000 to 40,000. M&U exports more expensive cycles only in European countries. As they are focusing on niche marketing so the price of these cycles has be below 5000 taka. We are planning to bring more cheap raw materials from china to reduce the price of our product. The quality cannot be compromised.
Trade Shows: M&U CYCLES will be visible at the two major industry trade shows. As we are focusing on niche market so the trade shows has to be in the rural areas. The shows provide retailers an opportunity to view upcoming products and chat with representatives from the companies as well place pre-season orders. Most of the customers will get a chance to experience a free ride in the show.
Advertisements: M&U CYCLES will be advertising in Bicycle Retailer, in the rural areas. M&U CYCLE’s target will be to do direct marketing. The focus will be dealers and retailers.
Website: M&U CYCLES will develop a website that includes a current catalog of their offerings. This will be the most up-to-date source of product information and availability. All advertising activities and trade show presence will highlight the website as an indispensable source of information.
Social Media: Nowadays Social Media is the biggest platform for advertisement for any purposes. It will always make word of mouth. I know that people in the niche area uses less internet but still it will grab the attention of the dealers to bring the cycles to them.
M&U’s mission is to create the largest selection of closeout bicycle parts & cycles. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.
Increase repeat customers by 6% per quarter.
Decrease the cost of customer acquisition by 5% per year.
Create general awareness of M&U CYCLE’s within the retail bicycle industry.
Increase the catalog of products by 15% a year by skillfully communicating to the manufacturers the success of this business model.
A double digit growth rate for the first five years.
An increase of the profit margin by 3% a year.
Profitability within one year.
M&U CYCLE’s will position themselves as the premier bicycle wholesaler of closeouts, specials and other deals, providing retailers with increased margins. M&U CYCLE’swill leverage their competitive edge to ensure the proper positioning.
Currently wholesalers in this market are not specializing their product lines. Everyone tends to carry a fairly wide range of things. It is a clear advantage to be focused and only concentrate a specific niche. By focusing on closeouts, retail shops can contact Wheelie Deals and always find products that offer very nice margins, uncharacteristic of the bicycle industry.
The trend of the industry in general is of consolidation. By offering value-added services such as closeout items which provide the retailer with better than average margins, Wheelie Deals is developing value that creates a steady flow of customers helping to not force them into a consolidation arrangement until they are truly ready.
The main objective for M&U CYCLE’s is to position themselves as the premier source for bicycle and bicycle component deals within the niche areas of the countries. The marketing strategy will seek to first create customer awareness regarding the products offered, then develop the customer base, and finally work toward building customer loyalty and repeat business.
The message that M&U CYCLE seeks to communicate is that they are the one-stop source for great deals. This will be done using several different methods. The first method will be participation at the national trade shows. M&U CYCLES will develop a visible booth to highlight the products that they offer as well as communicate to the manufacturers that they are a source for getting rid of their overstocks.
M&U CYCLES will also be developing advertising in the Bicycle Retailer, the premier industry journal. Lastly, M&U will have a robust website displaying all of the different products that they have as well as current availability, and the option of ordering online.
M&U CYCLE’s marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service.
Pricing: The pricing scheme will be a complex formula that takes into account profit margin, the forecasted period that the product will be inventory, and the availability of the product to other wholesalers. As we are targeting niche market the most so the pricing will be very reasonable.
Distribution: All products will be distributed from Wheelie Deals warehouse to any shop in the country.
Advertising and Promotion: M&U CYCLE’s will use a multi-pronged advertising campaign to generate visibility. They should focus more on direct marketing as well.
Customer Service: Retail shop personnel will be surprised at the level of customer service that they receive. M&U CYCLE’s business practices and customer training emphasize the importance of exceeding customer’s expectations. If this is accomplished, profits are virtually guaranteed.
During the last industry trade show, M&U CYCLE was able to conduct two focus groups with various retail shop owners/employees. The focus groups were designed to elicit information regarding the owner’s buying habits. Through careful development of the questions as well as skillful observation and recording of the focus groups, these activities generated a wealth of information. The focus groups supported M&U CYCLES belief that their business model is likely to be successful.
M&U CYCLE was also able to conduct a survey at the trade show. While some of the shop owners partook in the survey, the primary goal of the survey was to gain insight to the different manufacturers and determine their willingness to 1) use M&U CYCLES as a resource for unloading extra product, and 2) their keenness on negotiating exclusive distribution agreements with M&U . A fair amount of time was spent on the preparation of the survey. Dan was able to leverage his knowledge of probability and statistics to create a statistically accurate and significant survey. Without the assurance that the survey was significant and accurate, the conclusions would be worthless.
The first month will be used to secure warehouse space, set it up to accept inventory. and hire personnel. During the first six weeks relationships will be established with many different manufacturers of parts. These relationships will be based on M&U CYCLE’s willingness to take all of their closeouts. Typically, the manufacturer will call several distributors and eventually will find someone to take some or all of their product. M&U increased willingness to take all closeouts will create an incentive for the manufacturer to contact M&U first.Month three will mark the first decent month of sales. It is forecasted that sales will steadily increase after this month.
The purpose of M&U CYCLE marketing plan is to serve as a guide for the organization. The following areas will be monitored to gauge performance:
Revenue: monthly and annual.
Expenses: monthly and annual.
Difficulties and Risks
Problems getting a sufficient source of raw materials.
Unexpected costs in the warehousing and distribution of the goods.
An entry into the closeout market by an already existing wholesaler.
Worst Case Scenario
Determining the business cannot support itself on an ongoing basis.
Having to liquidate equipment to cover liabilities.