7 Cities Do It Yourself Auto Repair
Assignment 2Week 8: Marketing Plan Part B
Roderick D Williams
Strayer University

Marketing Management
Professor Caitlyn Worner
6/1/14

7 Cities Do It Yourself Auto Repair The concept of 7 Cities Do It Yourself Garage did not derive from the passion of an individual repairing their own automobiles, it derived from finding a money saving solution to small auto repairs. Many people do not change their own oil, which is a very inexpensive preventive maintenance cost. Once you get the feel for doing your own oil changes, it will lead to you learning more about vehicle repairs and the amount of money saved in the process. This knowledge will come in handy especially during difficult economic down times, like the economy in 2008. As you learn more about at home car repairs, some required tools and equipment are not available for use in the driveway or garage. Researching a few backyard mechanics you will find the same problems. In addition, many people that rent homes and apartments are not allowed to work on automobiles on the premise, of the rental property; in the city of Norfolk it is illegal and by owner discretion in others. Roderick Williams has been a vendor at a local flea market for over 10 years and through his consumer connections, he was often asked does he know of someone that can fix this or repair that. Another vendor sells stereo equipment, but there is no one to install the equipment, especially on rainy days or inclement weather. This has the potential to be a business. There is a need and want for a facility to accommodate the local consumer to do their own auto repairs. In addition, local mechanics can make extra money when friends or family are in need of car repairs. The many car clubs and motorcycle associations are a good group of potential customers. The birth of 7 Cities Do It Yourself Auto Repair, the company realized that there are many people that want to perform maintenance and auto repairs where the environment is clean and all resources are available. In addition to resources, customers want a place that is easily accessible and environmentally friendly for them to perform auto and motorcycle repairs. 7 Cities also provides a facility for entertainment, including flat screen TVs throughout the center, a lounge area for coffee and comradery, and great savings to all customers. They will provide a great experience for the novice self-repairer and the advanced. ASE certified mechanics and technicians will be on hand to assist with your repairs and the learning experience. It is their goal to provide you with outstanding customer service, experienced and expert advice and most importantly the opportunity to save you time and money on automobile repairs. Bay rentals are rented by the hour and not by the job, a simple flat rate pricing model that saves you money. Mission Statement The goal of the do it yourself business model is to fill the gap between businesses that sell auto parts and business that provide full service auto repair. This is done by providing service bays and tool rentals for clients that prefer to do their own auto repairs and maintenance in a professional garage. Secondly, they want to educate customers on the importance of vehicle maintenance and repair, and the potential to expand your budget. Company Introduction 7 Cities Do It Yourself Auto Repair is a sole-proprietorship, owned and operated by Roderick D. Williams. This is a do it yourself automotive repair facility, supplemented by onsite technicians for more challenging repairs. The facility will be located at 132 Kempsville Rd Norfolk, VA. Hours of operation are 8am-9pm; extended bay rentals are available upon request and type of repair or maintenance. This is a very unique concept in the automotive repair industry designed to save you money on auto repair expenses, in addition to offering classes on the importance and how to learn to do your own repairs. Financials The auto repair business is very expensive to start. The average initial start-up costs range from $150,000 to $400,000. (SBDCNet) The majority of the costs are assets which are needed for customers to perform services on their vehicle. We expect to keep three bays occupied twelve hours per day generating daily revenue of $1,440. Specialty and pneumatic tool rentals will generate an additional $600 per day. This is based on lowest customer expenditures creating $53,000 monthly. See sales forecast below.
Sales Forecast | Year 1 | Year 2 | Year 3 | | | Sales | $636,000 | $744,120 | $755,282 | | % Increase | - | 17% | 18.5% | | Sales/ Monthly | $53,000 | $62,010 | $62,940 | |

Environmental Analysis There are many obstacles in starting any car repair service. You must follow all safety and environmental regulations that could be local, federal or state. Maintaining compliance would render a successful business and workplace.
Political and Legal The company obtained a business license for the auto repair shop as well as registration of the company name with the City of Norfolk. This business is a sole proprietorship so they also received state tax identification, by visiting the Commissioner of the Revenue at 811 City Hall Ave. Norfolk, VA 23502. The business previously obtained a checklist for auto repair shops to prepare for zoning permits. (A Checklist for Auto Repair Shops) In the same building, a company representative visited the Department of Planning and Community Development. The purpose of this visit was to obtain approval with Zoning Ordinance requirements of the place at 132 Kempsville Rd. Norfolk, VA. This location was previously a gas and service station as pictured in Appendix A-D. That is the exact reason the company chose this area, because it is zoned for an auto repair business. This means less time and paperwork are required to obtain a zoning permit (City of Norfolk, Virginia). The company completed and returned the form SS-4 which is used to receive Federal Tax Employer Identification from the IRS website (IRS). The SS-4 is required to pay business taxes in the state of Virginia. They then applied for unemployment insurance with the Virginia Employment Commission in case of injury to owner or staff. The company then researched and compared insurance options for the company. They decided to stay local with Farmers Insurance Co. The business package offered covers all conditions of the auto service and repair business. The policy includes business liability, property (including tools), business auto and crime insurance. (Farmers Insurance)
Environmental
The automobile repair industry has many adverse effects on the environment. In today's world, the best practices are recycling and “going green”. The business contacted the Virginia Department of Environmental Quality and registered the company at the Tidewater Regional Office. They then joined the Virginia Auto Body Self-Certification program. This program provides training to help you understand environmental regulations and to correct any non-compliances. The company follows all the material use and supplies, safety and waste reduction policies; including separating hazardous and non-hazardous waste, recycling liquids and using absorbents to maintain spills. Following the policies and procedures enables the business to stay in compliance with the laws, regulations, as well as a green business (VIRGINIA DEPARTMENT OF ENVIRONMENTAL QUALITY). Economic The auto repair business saw a downshift in business locally during the recession, but nationally there were positive results. It seems as people are doing the bare minimum requirements to keep their autos running. Manufacturers are making automobiles more efficient but due to a decline in the economy many are holding on to their older cars/trucks. Costs are a major factor and this is where “7 Cities Do It Your Auto Repair” business model fit the needs of the local economy. Following your owner’s manual and completing regular maintenance, prolongs the life of your vehicle and saves money (Walzer, 2009). As a result, more people are choosing to repair then buy a new automobile. Technological There have been many advances in the technology of manufacturing automobiles that have a direct impact on the auto repair business. The Hybrid is more advanced and requires mechanics to be trained for this vehicle. The new designs require more expensive diagnostic tools and require less frequent repairs and maintenance. Although there are new technology advances the automotive repair business is still expected to grow four percent annually and mechanical services will lead in this growth (SBDCNet). Social/Cultural The Hampton Roads area is very diverse, mainly due to a strong military presence. The do it yourself garage rules are posted to maintain appropriate behavior while on the premises. The products and services are the same for all. There aren't many cultural differences to discuss when it comes to auto repair. Level of Impact Macro Environment There a forever changing regulations with hazardous waste and environmental issues in the auto repair industry. They increase costs in the operation of the business. Staying abreast and educated on the changes, will decrease the economic impact on the business and potential customers. When consumers know the reason for change there more conscience of the company’s effort to follow the regulations. Slow economic conditions has led many consumers to do their own repairs. A recovering economy that reduces the unemployment rate and increases personal income will increase revenue in the auto repair industry. Automotive repair is a needs-based business and currently more people are repairing vice buying a new vehicle. Once the economy is more stable, there will be a slight decrease in automotive repair. Trends Technological advances are having impacts on the auto repair industry. The manufacturing of Hybrid vehicles has lead to less frequent repairs and maintenance. Capatilizing on this trend is to have mechanics trained on the newer systems and obtain the necessary tools needed to repair the Hybrid brand vehicle. Competition The self-repair businesses that are in the Hampton Roads area are located on military installations. They are called Hobby Shops. The facilities are similar except they do not provide professional technicians to offer assistance on any repairs. The facilities are only for military personnel and their dependents. They do provide recycling facilities for waste, but it is not highly supervised. They are run by the Navy Exchange Service Command and are not revenue driven. It is mainly provided for the recreation for service members to maintain their vehicles. Although these facilities are similar they are more indirect competition because they do not cater to the general population. Target Market South Hampton Roads is composed of five cities. The total adult population is 802,735, composed of 49% males. The median household income is $56, 957. There is only 8% of this population military, leaving 92% of the market for 7 Cities Do It Yourself Auto Repair. (City-Data.com, 2014) Primary The primary target market consists of three segments. First are household customers, in which 55% of the people in Norfolk are homeowners. (City-Data.com, 2014) This group consists of consumer’s ages 35-44 and is more likely to spend money on vehicle maintenance and repair. This age group is more established and has more life experiences with bad business, to prefer to do it themselves. Secondly, within household customers is the age group 45-up. Although car hobbyist may be found in any age group this is the group we are to find the most. In this age group, people are well into their careers and children old enough for them have more time for their interests. The third segment are the 18- 34 age group, which is looking for cost efficient ways to save money as they are new in their career fields. The business will also look for innovators in this group to keep them abreast to new developing trends. As this group develops they will be the mechanics of the future. In all segments of the primary target market, they will find people looking to save money, natural do-it-yourselfers, and automotive technicians that are moonlighting to make more money. In addition they will find car and motorcycle clubs/associations and restorers of old cars.
Secondary
The secondary market is business customers. Included in this segment are businesses that have fleet vehicles, but do not have the finances for fleet services. Some examples are taxi and rental car companies, and trucking companies. The small businesses of this nature will be the focal point. This a great cost cutting opportunity to maintain their automobiles for regular maintenance and services, while not having to pay to maintain a facility for the services. Based on research business customers are 22% of the car repair industry revenue (SBDCNet). This will be used to build partnerships as both businesses are established. Branding Branding, involves putting "7 Cities Do It Yourself Auto Repair" in front of enough people at the right time, so that when there is a need for car repair service 7 Cities is engraved in a customer’s mind. This will be done by a social media marketing campaign, the new word of mouth. The experience and training with Local Edge (multi-media advertising) will be a definite benefit to the branding strategy. The company representative has sold social media marketing when he knew it could be done without assistance. Facebook and Twitter will not only be used as the word of mouth for a customer funnel, but as a communication tool. Presenting helpful hints on car maintenance, as well as YouTube videos of repairs from start to finish will create a following. It will also lead customers to our website where you can ask questions on repairs and leave comments of how "I Did It" at " 7 Cities Do It Yourself Auto Repair." Referrals will be handled through social media as well.
The sole proprietor of the company started working on his own cars/trucks after coming home one day and his wife was changing a gasket on the water pump, which leads to our next branding strategy: education. The classes are designed for women, but all are welcome. Every second Thursday of the month classes will be given on the basic maintenance of your car or truck. The reason it is important and beneficial they have these services done and most importantly how you can save money and "Do It Yourself." A certificate, business card and free t-shirt will be given away after completion of courses. The t-shirt will be complete with logo and slogan "I Did It" at "7 Cities Do It Yourself Auto Repair." Referrals will be welcomed as well.
Brand Extension Extending the brand will be made through special events such as; car and motorcycle shows by our clubs and associations. The company will have contests for all participating automobiles. The shows depend on which association /club that will be hosting the event. Another event will be the Father's day repair and maintenance. This will create a great opportunity for bonding and teaching your children the importance of car maintenance. Since many of the vocational classes are out of high schools they will also have auto mechanic classes for young adults that want to pursue a career in the automotive industry. Pricing The pricing concept is not based on the type of repair or maintenance, like normal repair facilities. The price is based on how long it will take you to complete the service. There are three pricing categories. The gold do it yourself kit includes a standard tool kit, vehicle lift, lights, workbench and certified technician for final work evaluation. This package costs $40 per hour. The silver package is $50 per hour. It includes everything in the gold, with the additional assistance of a certified technician working side by side. This is great for the novice in auto repair. The gold package is when 7 Cities does your repair. The great thing about the pricing strategy is that you can move from one package to the next at anytime during your repair. Rather by choice or not, you’re never alone in the garage. In all cases of the pricing strategy there is an average savings of 60% by doing it yourself. Distribution The company will distribute their services by direct sales and partnering. The direct sales will be done by flier promotions at local car shows and auctions. Fliers will be posted on stranded vehicles as well. Postal mailers will be sent out to the target market on a monthly basis. Adding car maintenance tips and videos on Facebook and YouTube will engage the social media audience. The business will partner with local used car lots, junkyards, auto part stores, towing industry and car washes. These partnerships will engage potential customers in the need for repairs. Performance Analysis Qualitative Metrics The business owner interviewed customers buying car parts at ten locations and asked them where were they completing the repairs or service. This information was collected to gain an understanding of how and where potential customers were doing auto repairs. This information will help us increase customers wants or needs. Secondly, they asked realtors and apartment managers their policy for car repairs on their premises. This information is useful to assist the company in targeting customers that live in the rental properties. Next, surveys and fliers were placed on homeowners door to see if they were interested in self service auto repair. This was done to see if there was a need for the auto facility amongst homeowners, since the majority of homeowners are married couples , and they spend the most on auto repair service and maintenance. Lastly, a car show and cook out was held to show our purpose in the surrounding areas. The company used this opportunity to closely engage customers in regards to what they expected from a self service auto repair business and engage potential customer attendance. Quantitative Metrics 7 Cities Do It Youself Auto Repair builds relationships with customers. They measure their success by bay and tool rentals, so a membership program was established which provides a set revenue flow. Once a customers realizes the benefits and advantages of becoming a member, 7 Cities can increase membership and revenue monthly. Scheduled gaps will be filled with walk-in customers to introduce them to the programs and classes. Class participation will be measured based certificates of achievement. The edcuational process and sense of achievement increases memberships and revenue monthly. Comminity involvement is all about educating customers on the importance of vehicle maintenance. Most importantly to show customers the total savings of doing it yourself. Customers evaluate our staff by surveys each visit. A database is kept, so they know how often a customer is using the services as well a their level of satifaction. Consistently making improvements based on the surveys has helped maintain customer retention at 90%. Media Marketing A mobile marketing campaign will be utilized to reach the on the go concumer. Text messaging and mobile announcements will be uesd to inform consumers of scheduled calsses or invites to classes. Specials events like community involvements and car shows will be sent through mobile media. If can’t make the car show, you will be able to see the video on your mobile device live. In today’s society everyone has a website. 7 Cities has the ultimate in search engine optimization. Key words have been developed so they are found through the major search engines Google, Yahoo!, or bing. When you go to the search engine, just enter Do It Yourself Auto repair and will find the website on the first page of your search. Once you’re on the website you will an active blog filled with questions and answers to your automotive needs and concerns. In addition to that, the website has links to various discounted auto parts. Integrated Marketing Social media is the most direct form of adverting for 7 Cities. Social media will show 7 Cities concerned for the community as well as developing the knowledge of the community when it comes to auto repair. All classes our announced a month in advance and you may register through the website, face book or mobile media. Print advertisements are used throughout the community for social events and car shows. Performance Standards Monitory Customer sercive is paramount in the auto repair business. Although this is a Do It Yourself concept performance of the business will still be measured. The first method used is certifications of the staff. Training is an ongoing process, as new technology is developed the staff is getting trained on the new concepts or procedure. Secondly customer retention keeps you in business. 7 Cities ensure all service performed individually or assisted is to the upmost satifaction of the customer and factory specifications. You may do it yourself, but it will not be done incorrectly. Financial This automative repair is mainly tied to assets(tools). All tools have an embedded electronic device or engraving of our choice for each tool. Inventory is done at the end of each bay rental session. This prevents loss or thefts that will increase insurance premiums. Secondly, is time. Bays are rented on an hourly basis. The customer must enter a time card for start and completed time. Time is not completed until car is out of the bay and checked by master technician. Once card is stamp completed you may not re-enter service area without time ticket. This method is used to ensure each bay reaches daily revenue potential. SWOT Analysis Strengths The main strength is the location. It was previously a gas station and auto service location. It is located at an intersection that is highly visible. There is another gas station and automotive repair station across. Being close to the indirect competition is good, because it allows our customers to easily compare the prices of doing it themselves. The location is two miles away in each direction from an Advance AutoParts and Auto Zone. They are very cost efficient because bay rentals are hourly and not by the job as most auto repair stations. Professional high quality and specialty tools are provided, which most do it yourselfers lack. Most importantly the staff works hand in hand with the customers and is able to build stronger relationships. Weaknesses In most startup businesses it’s automatically a weakness until you build re pore with your target customers. Startup costs alone have the company on a tight budget. The company does not have direct competitors for the targeted market but the indirect competition is a bigger weakness. Some people will not want to do it themselves and would rather go to Pep Boys, Firestone or any like business to have their repairs and maintenance done. Since this is a do it yourself repair station they are limited to the amount of repairs they are able to perform. Another weakness is the company is not providing parts for you to do repairs. Opportunities There are many opportunities in the self-repair business. Local mechanics can post their credentials on the website for customers in need of repairs, allowing certified working mechanics to make extra money and unemployed mechanics to earn some money. There is plenty room for expansion in other cities, in the Hampton Roads area because “7 Cities Do It Yourself Repair” is the only self-repair station that is not located on military installations. There are four cities in the Southside and two on the peninsula to expand our locations. The company will be available to form partnerships with local retailers such as AutoZone, Advance Auto Parts and Oreillys because most of the customers buy parts from them, but they cannot perform self-repairs on their facilities; leading to one of the future expansions of providing wholesale parts to 7 Cities customers. Threats In many auto repair shops state and federal regulations are always a threat. Violations in this industry charge steep fines and business closures. Technological advances have made drastic changes to the repair business and once the total electric cars are popular, you will need an electrician not a mechanic. As seen in 2008 any major downturn in the economy will change are close a business. Stiff competition is a definite threat, although it may be cost effective to do it yourself but is it done right. This is a constant battle and the staff of certified technicians checks all completed repairs before you leave the premises. Competitors Competition includes all other venues that provide automotive services such as: gas stations, car dealerships with services, and stores, like Sears. When 7 Cities expands their business to provide autoparts, autopart locations will become competitors. The competition is a dual edge sword inter- competitors and intra-competitors. The strengths are they have brand names, reputations and an existing customer base. The weakness of our competitors are the competitative advantage for the Do-It- Yourself concept. They provide a service or a product. The 7 Cities business model provides a place, service and in the future products. This is the first business of its kind in South Hampton Roads. 7 Cities Do It Yourself are trendsetters in the local auto repair market. Strategy and Implementation Summary 7 Cities Do It Yourself Auto Repair will be a success by offering and new concept to the Hampton Roads area. A clean and environmentally friendly facility for you to work on your automobile or motorcycle is provided. The business is considered the middle man in the auto repair business because, at this time, parts are not for sale or offered, but a place and tools are provided for you to install and replace parts. The do it yourself idea can be supplemented with assistance from certified mechanics for advanced repairs. This facility is offered to military on many installations and now 7 Cities is making it available to the public. The plan is to open shop in April of 2015. April was chosen because it is the beginning of the spring season when future customers are getting automobiles prepared for summer vacations. Implementation Time Table and Action Plan The tentative opening date is April 12, 2015. Roderick D Williams, sole proprietor of the business will be the owner/operator of the business. The responsibilities will include accounting (payroll), sales and marketing and business strategic operations. The operations staff will include a Master Auto Technician and two ASE Certified Mechanics. The Master Technician responsibilities include all garage related activities, including: environmental issues, inventory, and equipment maintenance. The two ASE Certified Mechanics maintain shop cleanliness, car repair assistance and total repairs. The entire team is responsible for customer satisfaction. The staff will be hired through local Technical Colleges to ensure hired staff is trained and have current certifications. The business will be fully staff ninety days prior to grand opening. The location of 7 Cities was a former gas station and repair facility. It has been closed for nearly six months. The location is already zoned for an auto repair facility and meets all environmental requirements. The design of the facility has been completed and ready for occupancy. All required equipment will be installed sixty days prior to grand opening. The market research will be completed four months prior to launch. Surveys were passed out to local consumers at auto part locations, with overwhelming results for this type of business. The same results were recorded for local homeowners and surrounding apartment locations. Five Year Expansion Plan Year 1 7 Cities Do It Yourself Auto repair will expand to offer wholesale auto parts. This will be done to add a product to the service based revenue and further differentiate them in the market. This will add to the competitive advantage and increase market share by 7%. Year 3 7 Cities current location is on the borderline of Virginia Beach and Norfolk. In year three, they would like to establish a new location on the border line of Suffolk and Chesapeake or Chesapeake and Portsmouth. This will bring the business closer to the Chesapeake population which are 63% married. This target group spends the most on auto repair and maintenance (Auto Repair Shop Industry Report.pdf, 2014). Expanding the reach to these consumers will increase market share by 17%. Year 5 Locations will expand to the peninsula, covering the entire Hampton Roads. Hence the name “7 Cities Do It Yourself Auto Repair”, will be in the close proximity of the seven cities that make Hampton Roads. This not only expands the brand it gives the brand a more defined meaning because the business is in seven cities. This will increase revenue by 25% because 58% of this population is married couples, with a median household income of $56,000. Appendix E shows the city demographics in a graph in regards to the potential revenue growth as we expand in the market. Positioning Statement The company provides the perfect opportunity to save hundreds on costly repairs and the pride of saying, "I Did It" at "7 Cities Do It Yourself Auto Repair." The features of bay rentals are equipped with a 200 piece standard tool kit, lift and an ASE Certified Technician to evaluate your completed repair. This advantage will give you a piece of mind that the repair or maintenance was completed to your satisfaction. The benefit is that our business saves you time and money. Customer Behavior Customer behavior in the automotive repair business is simple, take it to the dealer, repair shop or buy the part and do it yourself. The automobile will be repaired, especially if needed daily. The target customer demographics correlate directly with the spending profile of the auto repair industry. The ages of 45-54 are twenty-eight times more likely than the average person to spend money on vehicle repair. The ages of 35 to 44 are ten times more likely than the average person, and the ages 55-64 are ten times as well. Married couples spend the most on repair and maintenance, while a single person spends the least (Auto Repair Shop Industry Report.pdf, 2014). Overall Performance Based on the objectives of the marketing plan, “7 Cities Do It Yourself Auto Repair” will successful. This is a new service in the Hampton Roads area, creating a niche in the market. The target market for this business is more than abundant and has the level of income to warrant a do it yourself alternative in the market. The advertising and marketing campaign will reach the hobbyist as well as the person seeking to save money in auto repair. This company will provide assistance in the repair and you’re never alone in the process. The business will stay intact with all environmental factors and will be a mainstay in this business for years to come. Social media and search engine optimization will have the company easily found as a cost saving technique in auto repair. Maintaining a competent staff that is abreast to changes in the industry will be a definite plus. Building customer relationships is the backbone of the repair industry and this business model is designed to get to know your customer, for more than what does it cost. Plans for future expansion will definitely supplant this niche service in this market. Conclusion The marketing efforts of 7 Cities Do It Yourself Auto Repair was covered. The 6 aspects of the evironmental analysis covered the elements that exist, and how thay can be overcome. The company specified the Primary and secondary markets for the business and the reasons for the focused market. The branding strategy effectively shows the plan to put the name in front of as many people as possible through social media, classes and hosting events. The true understaning of the business will come from an individual personal preference. The next time you have a car repair or maintenance done, ask the mechanic to show you the work performed. Think about the time and money you spent. If you have the thought of that was easy, then you to could have did it yourself. In the end, this is a money saving concept that is great for a stable or unstable economy. Roderick D. Williams does not like to do car repairs, but when saving money is involved, he too will do it himself.

References
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Appendix A Front of location shows three bay areas.

Appendix B Front of location reception area

Appendix C East View showing Gas and Repair Station

Appendix D
East North view of 4 way intersection traffic flow

Appendix E