Dr. Shirley Todd McLaughlin, CLU, ChFC - MKT 500 Marketing Management
Week 10 Assignment 5: Marketing Strategies

“Peloton Cycling”
Anthony Pastore

6.9.12

Executive Summary- Marketing Plan Peloton Cycling

The market- The target market for Peloton Cycling will be towards the cycling community. Since I have been an avid cyclist for twenty years, I am familiar with the network of cyclist including events, shops and organizations. The plan and focus of Peloton Cycling will be to attend, participate and host cycling events in order to advertise our product and inform the community of our mission. In addition to targeting the cycling community, the target will also include to the community who are interested in a healthy lifestyle, including the triathlete. The potential audience for the marketing plan will include a full range of the cycling community including the avid cyclist, the professional looking for an extra edge, the intermediate cyclist riding in order to maintain a healthy life style and a family who enjoys biking. In addition, the target will include the mountain bike trail rider.
The plan for Peloton Cycling to reach its target audience will include the participation and hosting of cycling events. In addition, during the cycling events, Peloton Cycling will distribute shirts, stickers and fliers, in addition Peloton Cycling will build relationships with local cycling clubs who normally host cycling events and guide group rides. Peloton Cycling will also have merchandise stations set up during events not only for cycling gear and equipment, but to also offer information on the product, the facility, programs and benefits associated with Peloton Cycling. Although, this is a typical marketing plan, Peloton Cycling believes its important its recognized in the community of cycling as well as the community in which it will operate and be located. Peloton Cycling will host local cycling events, including programs for free local guides and daily rides. The local guided ride is a major factor since new coming cyclists are never sure

of the proper areas or trails to ride. This will be a good tool to expand on the target market and have a relationship with the consumer. In addition, Peloton Cycling will have open programs for bike maintenance, tips on teaching children to ride bikes and safety practices including importance of helmets and selecting the proper helmets. This open community items will assist in building a relation with the target audience and building as relationship with the consumer.
Competitive Comparison
In almost any retail industry a specialty shop will be slightly more expensive than a mass retailer, due to the higher prices charged by suppliers. Peloton Cycling is no exception. The prices we charge for training, bicycles, parts, and accessories are higher due to the target consumer and specialty service.
What we will offer, that cannot be matched, is our dual service coupled with biking, training and fitness and knowledgeable service. We are passionate about cycling. People do not go into the bicycle business because they want to get rich quickly. They enter the bicycle industry because they love bicycles. That kind of passion and commitment comes across to customers when they find a sales person who can fit them to a bicycle so they feel comfortable and want to ride it. Someone who recognizes you and remembers your name is a welcome feature at a specialty store.
Our planned location will be a competitive advantage for us. Our customer base will be predominantly the cycling community. The convenience of local sales and service as a result of the Interstate 9W cycling path brings our customers in. They know they can get the service they desire with the knowledge of their target ride.
The Mission Statement & Company Introduction
The mission statement of the company will be “Get into the race with Peloton Cycling and Training” Peloton Cycling provides the winning edge while keeping your mind and body in the race” Very simply- “Get in the Race, before the Race”.
Peloton Cycling focus is to create an environment for the cyclist, whether they are a seasoned veteran, professional, intermediate and family. Therefore, the market plan to expand on business is to have merchandise available for purchase. Therefore, the plan for Peloton Cycling is to have merchandise that includes cycling gear, bikes, equipment and apparel, including specialized Peloton Cycling bike jerseys.
The Company concept is to provide training opportunities for cyclists where they are able to continue training through the off-season months while being able to enhance their training regimen.
I am avid cyclist who looks forward the seasonal months to resume my cycling activities and although I have a trainer in the garage and frequent the gym to continue my training, I miss the feel and environment of the bike. The concept of my company Peloton Cycling is to combine the training regimen of cyclist, the clamor of bikes and people discussing cycling coupled with the proper gym equipment to assist athletes with training that will keep people focused on training and cycling long into the winter months. The premise for Peloton Cycling is to simply create ant environment that will attract cyclist who are looking to maintain the edge through the off season, while the opportunity to develop, enhance and maintain their mental and physical desire for cycling in the offseason.

In order to create this environment, the focus if Peloton Cycling is to have a gym with the required equipment that reflect the muscle training the benefit a cyclist. In addition, we will have several bike stations with interact rides. The plan is to have large screen monitors with trainers that can replicate famous races, trails and rides through the world including stages of the Tour De France. In addition, customers will have the ability to compare their statics to other participants and professional cyclist. The stations will have options that include a stationary bike for use and or the ability to mount their own bike to the trainer. The plan is to replicate the environment of a ride while providing the opportunity to enhance training and increase performance. The plan for the facility is to be multipurpose, providing the an environment with cycling graphics personnel bike trainers, weight training and nutrition including a educated staff to write training plans, bike fittings. In addition, the facility will include merchandise and cycling equipment including bikes for all levels of cycling.

Branding Pricing and Distribution Plan
The bicycle industry is a mix of old and new technologies. Frame sets are made of various lightweight materials: T-6 aluminum, 4130 chromium-molybdenum steel, titanium, and/or carbon fiber matrix mixes. And yet the drive train is still a linked chain moving over cog gears, on axles supported by ball bearings. Therefore, our approach for branding our product will be the same; simple and classic with a modern approach to the industry.
The brand must be clear, specific, and unique to your product. For example, the Wheaties brand differentiates the cereal from its competition due to its association with health and sports excellence. To achieve the same successes with your products, we need to execute the following steps to establish an effective brand:
We chose an appropriate name that is easily remembered and specific to the product. “Peloton Cycling” anything longer or more complicated will difficult for customers to recall. This process may require legal screening to guarantee availability of the name and customer input to assess attractiveness and appropriateness of the name. The selected slogan is “Get in the Race, Before the Race”, its catchy and easily remembered. It’s a clear message that identifies with cyclist who are looking to increaser their cycling performance. Our logo will have the outline of a cyclist in black and yellow, typical colors associated with cycling- our target is to have a simple geometric shape or as elaborate as a silhouette of a person or object. We intend on using the name, slogan and symbol on every piece of correspondence related to the product e-mails, invoices, letterhead, business cards, advertisements and promotions, etc. This system will eliminate inefficiencies in creative and production fees and extend the branding process throughout everything we do. In a sense, it will prevent recreating the wheel with each new media effort.
Our product name, logo and slogan are intended to be simple and clear while sending a clever message to community from the avid cyclist to the recreational biker.
Pricing Strategy
Pricing of bicycles is very tight with a markup of between 30% and 40% depending upon the brand and model. Many people believe that bicycles are priced like automobiles and are open for negotiation, and make almost insulting offers. The shops have little leeway here.

Parts and accessories are generally keystone priced. Some small items cost more in handling and sales than they do to buy from supplier. These can be double and triple keystoned, because customers won't buy them if they don't have a minimum perceived value. On the plus side, these are great "throw-in" items used to close the sale of a bike. When new technology arrives in bicycles, and if the supply is limited, almost any price can be demanded. This was the case in the mid-1990s when RockShox introduced suspension forks for mountain bikes. The bike nobs would pay whatever was asked just to get those forks. Of course, in this type of situation the price, both wholesale and retail, lowers.
Other accessories, such as step-in pedals, pannier racks, helmets, or headlights are sometimes heavily marketed by the manufacturers. While this drives demand and brings people into the shop to get these items, the suggested manufacturer's retail price may limit markup.
The markup on clothes, shoes, jackets, gloves can vary from keystone to triple keystone, depending upon product, manufacturer, country of origin, and customer perception of value. Pearl Izumi and Burley Design rainwear can demand premium prices as top-of-the-line garments, but many budget conscious students can only afford a $35 nylon windbreaker. It has been and always will be a demanding job for us to adequately stock garments at the various price points.
We try to maintain a basic "Hourly shop rate" at $55/hour. Standard repairs are then priced based upon an average time for completion. Some repairs, such as a flat tire, are limited by customer perception of difficulty. Examples:

•Flat Tire -- $17.50 •Install Fenders -- $20.00 •Brake Adjustment -- $35.00 •Tune-up -- $75.00 •Overhaul -- $100.00 All parts used in repairs are priced at keystone, and added to the labor service charge. With several other bicycle shops in the city, there are some price constraints based on competition. Coupons and specials can balance price ceilings by drawing in customers.
Sales Strategy
Sales vary season to season and with May being the most popular biking month. Accessories and rainwear sales increase in the autumn and early winter. Repairs and maintenance are steady. Holiday sales are brisk, though generally leaning again to accessories, parts, rainwear, gloves, helmets, headlights, etc. Winter sales are moderate, and then pick up in springtime as people put away their skies and look forward to local outdoor activities, longer daylight hours, and drier weather.
We have three large sales promotions each year.
1. Spring. This coincides with both the return of nice weather, and beginning of May, a popular biking month. We feature new bicycles, and repair/maintenance/tune-up specials. It is important to us to have a good selection on hand at this time. When people decide they want that new bike, they want it now. If we don't have the bike then, and make the sale immediately, many riders will decide that they really can get another season out of their old bike, and will spend their discretionary income on some other purchase.
2. August/September. This is our biggest sale of the year. New bicycles, locks, helmets, racks, fenders, backpacks. We always search for a special purchase of good quality, but value priced bikes for this sale such as yearend models, slow sellers, new line looks to break into the market. These bikes will almost always sell out to students seeking great values.
3. Year-end holidays. The retail market demands some participation in this annual buying frenzy, yet, this sale produces lower revenue than our other two events. We sell fewer bikes, and more accessories and clothing. We expect to have out training program pick up as winter riding will be down and many riders will be looking for an opportunity to increase their riding performance for the next season.
Strategic Alliances •Bicycle manufacturers - continuation of dating programs and financial agreements. •Accessory suppliers - continuation of financial agreements. •Parks Dept. - we sponsor printed map of city bike paths to publish on our website. •Maintenance, supply service contract for cycle security. •Website design and maintenance, search engine placement.

Marketing Strategy
Our marketing strategy seeks to optimize our advantage of prime location. We want the local population to see us as their bike shop. We want them to see us as part of their daily experience, and a shop they can depend on for quick repair and maintenance service.
E Commerce / Web Plan Summary
We will have a Peloton Cycling Website. Our content site will also serve as a marketing medium. We offer downloadable maps of the city bike routes, maps of rides outside the city area, give information about the store, and announce sales. We believe that cyclists will regularly access our site for the valuable information we will provide, and this will reinforce theirof awareness of Peloton Cycling, and we will become their bike shop of choice. In addition, our website will provide our customers the opportunity to schedule training sessions, track their progress and compete against other members.
Print advertising. In addition to our coupons, we will keep a small 3 column inch ad appearing on a recurring schedule in the Daily Hyperbole. To boost citywide awareness of our sales specials we will also run slightly larger ads in the local newspapers during the weekends prior to the sale.
The Peloton Cycling Company website will be designed to be a content site. We have neither the desire nor the time to attempt a full-blown e-commerce site. There are several large mail order/e-commerce companies, such as Performance, Bike Nashbar, and REI, and many smaller companies who are well established in the marketplace. We could never compete successfully against them.
Our target markets will be immediate. They are within cycling and walking distance of us, so we are providing locally topical information to them. We plan on using search engine consultants for the design and upkeep of our site, and especially for their expertise in gaining favorable listings of our website in the Internet search engines. Just putting up a website is not enough. Without the proper coding and search engine linking, a website will never appear in a Yahoo! or Google search. We don't have the money to buy our way to a top three listing on every search, but our consultants will get us into the search engines, and appearing higher than our local competitors.
After carefully examining the market conditions, we have come to the conclusion that there is a strong demand for a Cycling shop that can offer merchandise and training. There are very few businesses in the area that offer both, the opportunity to stay current with equipment and the training. The Peloton Cycling Company will not only sell bicycles, bicycle accessories and offer training services.
We feel that our promotional efforts and business location will generate the exposure necessary to enable us to achieve our sales goals. We firmly believe that our plan and goal projections are realistic in turn a successful product.

IMC and Customer Satisfaction Plan
Typically, advertising for a Bike Shop Business on a budget means you need a Bike Shop Business Plan. Peloton Cycling can identify key selling points and ensure we can advertise our

business as cheaply and efficiently as possible. Word of mouth is the best way to advertise for free, a friend tells you that he had just had his roof redone by a company that was very good, and not too expensive. If you were looking for someone to redo your roof would you go with this company, or would you look in the directories to find a different one? Of course not! You would go with the company your friend suggested. That’s the power of word of mouth advertising. It is the most influential and cheapest advertising method you will ever find.
There are two ways Peloton Cycling plans to promote our business by word of mouth
•get others to talk about Peloton Cycling
•we will speak about Peloton Cycling
We will start with getting others to talk about Peloton Cycling. The best way to do this is to surpass our customers’ expectations. We will do this in simple ways. For instance, a flower shop may include a single rose with an order of a large bouquet; if this is not advertised but just a surprising extra it is sure to get talked about. You will have a few customers order bouquets wondering if they will get an extra. When they do they will be delighted and will pass on the word that the little flower shop gives more for your money. A similar way to get talked about is to tell lively stories. You know the kind that people can’t help but repeating. If you don’t have any, listen to others. When you hear them tell a funny story that you think might amuse your customers jot down a couple notes that will jog your memory later on. We will keep these in good taste and always positive so that our image will remain that way. When people repeat these

stories they will be asked where they heard them and then Peloton Cycling will be mentioned and many conversations will turn to talking about our company.
Another way to get people talking about Peloton Cycling is to provide extra information. This can be information about the history of the business and or staff, including racing and biking careers.
Other information we will provide are ways to save customers money or get them noticed. People will share this information with associates and our company will be mentioned, if this happens often enough people will begin to know Peloton Cycling as a fantastic company. When meeting someone new you will probably ask something like, “so what do you do?” The person will tell you and then ask you the same question. The key here is to ask them first. That way there is more time to talk about your business, because they are not sitting there waiting to tell you what you do. Make your job sound as interesting and useful as possible, and they will remember it.
Another way to enter Peloton Cycling into conversations is to look for ties. Listen to the conversation and subtly insert comments like, “yes, just the other day I got a call like that from one of my customers”, or “I went through a similar experience just when I was starting my own business”. Keep your comments positive, no gossiping here. Gossips will get a bad reputation quickly. You may get talked about, but you may also get labeled as the business to avoid.
Peloton Cycling plans to keep comments positive and complement our customers. When they leave they will remember the good feeling they got from Peloton Cycling and will refer friends

and family. Using this method of advertising will get Peloton Cycling more customers and cut down on your advertising expenses.
Product Giveaways
Typically, companies will hand out advertising material, like pens, rulers, magnets. We plan on giving away something that is unusual and that will get talked about. Including racing stickers for helmets and reflectors. We want to break away from the typical flare and give away items not typically expected. We plan on giving out water bottles, water bottle holders and air gages with Peloton Cycling flashed across the products.
Peloton Cycling advertising information
Business advertising avenues offer free marketing and many options that can provide an added exposure for the advertising dollar. Millions of new businesses start up each week and their key to their success, and ours, is the same:
•effective advertising
•low cost marketing techniques.
Many Bike Shop Business owners believe that they do not have a budget for advertising. Then there are the other business owners that believe they cannot afford NOT to advertise. The answer to them both is that advertising is essential.
"Advertising doesn't have to be expensive to be effective."

There are many advertising avenues that offer free marketing and even more options that can provide more exposure for advertising including public relations.
Press Release
A well written press release is a excellent way to make the public aware of the company. Peloton Cycling plans on submitting a press release to local and national newspapers, radio, television, magazines and trade publications both online and off. We plan to make our press release attention grabbing, truthful and newsworthy to get an editors attention. To ensure the best results focus our article we be on a targeted audience instead of a wide readership.
Sponsor contests
Another way to receive free advertising is to offer to sponsor a contest for a community event or large publication. By furnishing the winning prize our advertising can come in a variety of methods. If the contest in on-line you will be offered a free banner link or rotation on the contest entry page and are often given a 6-8 line advertisement to be included in a subscriber newsletter. Normally this advertising package can cost from $30 - several hundred dollars depending on the size of the web site.
When sponsoring an online contest always ask how many unique visitors they receive to their site in a month or how many participants visited the contest page during their last contest. We will send the prize to the main web site prior to the contest or forward the prize directly to the winner.

Twice a year public television stations will also have a broadcast in which prizes can be donated in exchange for advertising or the merchandise could be auctioned. Generally you will be asked to provide a sentence or two to be read on-air while our product is being shown by the camera. Some public stations will also allow you to choose the demographical area you wish your merchandise to be used. We will ensure the advertising is focused towards our main target market.
Mailing Lists
The internet has hundreds of thousands of mailing list that we can subscribe to and sell our product or service. Even if the list group does not allow us to sell our product, it is common practice to have a 6-8 line "signature line" that is automatically put at the bottom of all outgoing messages, e-mail responses and forwarding e-mails. Using a search engine you can read a description of what types of lists are available to choose the ones that would be made up of our target audience or potential customers.
Online Auctions
Although online auctions can take a lot of time to run successfully, they can also be very profitable. The large auction sites generally charge you a fee to not only sell your item but also to list it. Some fees are percentage based while other sites are a flat fee per listing. Smaller auction sites are usually free and although they do not receive as many browsers, we can have same amount of successful sales without fees!

Chat Rooms
On-Line chat rooms are a location where people can communicate in real time. Chat rooms are available for just about every topic and are divided into rooms by category.
Networking
Taking the time to meet other business owners at internet malls, homepages, websites, community events and industry craft-fairs are another good way to advertise our business. Fellow business owners are generally eager to share their success as well as their failures and can pass on information regarding potential clients that they themselves could not help in their area of expertise.
Business Cards
Having business cards available is essential in networking whether you are working with fellow business owners or potential clients. I am listed business cards as a free advertisement because there are several companies that will print over 250 business cards and address labels absolutely free for use.
Advertising Exchange
Where direct mailing campaigns can be costly it is very inexpensive to join a group of fellow business associates who will mail out your advertisement with their product orders. Peloton Cycling will offer to do the same so it is a win-win situation for all involved only costing the paper the advertisement is printed on!

Writing Articles
We live in a 24/7 age and there is a real shortage of good articles for publications both online and offline as well. By writing an article about a topic that our target audience would be interested in you could get our “advertisement” into publications and onto sites you could be getting your advertising for free; whilst your competitors are paying.
The key is to write an article that is interesting enough that the readership will continue reading to the bottom of the article where our author by-line and company information is located.
This ad space will only work if we get the readers immediate attention. Offering a coupon or discount can be both eye catching and might be the incentive they need to act upon. Most articles used online will be archived and our need to be willing to honor the coupon if product orders surface months later from an archived article being read.
Although it is a personal choice, we will ensure to maintain our copyright unless the publication is willing to offer payment for our work.
Remnant Space Advertising
When possible and our advertising budget allows Peloton Cycling will investigate paid advertising noting it should be rare to pay full price. Almost every media has left over space that the industry refers to as "remnant space". Advertising is a perishable commodity and it is not uncommon to be able to purchase bonus television or radio airtime. We will investigate several avenues for a package deal. Newspapers offer the most remnant space but could be more difficult

to work with unless we are an established advertiser. Typically, you will generally not be able to choose the time or location in which your remnant space advertising is ran.
Resources
J. B. Quinn, "Strategies for Change: Logical Incrementalism" (Richard D. Irwin, 1980) a b Baker, Michael The Strategic Marketing Plan Audit 2008. ISBN 1-902433-99-8
-- The book "Principles of Bicycle Retailing III" by Randy Kirk. Available from Info Net Publishing, with discounts for NBDA members. www.infonetpublishing.com
-- The Complete Guide to Bicycle Store Operations with CD ROM, by Ed Benjamin. A comprehensive system on how to operate a bike store. Available from Info Net Publishing; phone 949-462-0224. www.infonetpublishing.com
-- The Bicycle Retailer and Industry News Industry Directory, a complete directory to industry suppliers, $75, from Bicycle Retailer and Industry News, www.bicycleretailer.com, or phone 949-206-1677.
"Mother Earth News: How to start your own small-town bicycle shop". Retrieved 2009-01-20.
"Serotta Custom Frames". Retrieved 2007-01-13.
"NBDA: The Bike Shop Advantage". Retrieved 2009-01-20.
Sherry, Jennifer. "Bicycling Magazine: Props For Your Shop". Retrieved 2001-01-20.