Marketing Plan – Programmable Cruise Control
Rebecca L. Smith Table of Contents
1.0 Executive Summary
2.0 Situation Analysis
2.1 Markey Summary
2.2 SWOT Analysis
2.3 Competition
2.4 Product Offering
2.5 Keys to Success
2.6 Critical Issues
3.0 Marketing Strategy
3.1 Mission
3.2 Marketing Objectives
3.3 Financial Objectives
3.4 Target Markets
3.5 Positioning
3.6 Strategies
3.7 Marketing Mix
3.8 Marketing Research
4.0 Controls
4.1 Implementation
4.2 Marketing Organization
4.3 Contingency Planning
5.0 Conclusion
1.0 Executive Summary
Smith’s Cruise Controls is a new company that offers programmable cruise controls on Honda vehicles, starting with the Civic in 2012. The Civic was chosen because they offer a hybrid model and is already gas efficient and is the most popular model sold by Honda.
The programmable cruise control will allow the driver to set two different speeds that will stay programmed after the vehicle has been shut off and back on again. This allows the average commuter to not have to continue to change the speed as their travel requires them to do so. This option will also allow the driver to save on gas mileage, which is a concern with consumers.
Although there are cruise controls available today, Smith’s programmable cruise control allows the driver to set two different speeds to alternate between as they are driving. Current cruise control only offers one speed setting and resets each time the vehicle is restarted. Smith’s Cruise Controls will develop its company by expanding into other Honda models, including Acura models.
Smith’s Cruise Controls will also have a website that is accessible to consumers to answer any questions about the product, by providing a description of the product and frequently asked questions. The website will also include the information that shows the savings on gas mileage when the product is used regularly by the driver.
2.0 Situation Analysis
Smith’s Cruise Controls is starting its first year of operation in producing programmable cruise control for Honda Motor Corp., starting with the Civic models. Marketing will be key to the development of product awareness as well as the growth of the customer base, possibly other models offered by Honda Motor Corp., such as the Accord, Odyssey, CR-V, Element and Pilot. One of the critical factors that may hinder the sales is the current economy, although I am hoping the programmable cruise control will be a buying factor when consumers are looking for a new vehicle, especially because it helps in fuel mileage.
2.1 Market Summary
Smith’s Cruise Controls possesses positive information about the market and knows a great deal about ways to save on fuel mileage. This information will be influential to better understand who is served, what is important to the consumer and how Smith’s Cruise Controls can better communicate with them.
Smith’s Cruise Controls is starting with the market of those who purchase Honda Civics. In 2010, there were a total of 281,180 units, including the Hybrid model (Niedermeyer, 2011). The amount of sales on Civics has improved .8% since 2009 (Niedermeyer, 2011), and we can only hope it continues to rise in the future. With the fuel prices rising, more consumers are looking to purchase fuel-friendly vehicles, and we are hoping a programmable cruise control will influence the consumers because it helps with conserving fuel mileage.
Smith’s Cruise Controls will differentiate itself by marketing a programmable cruise control not previously available to consumers. The option currently available on Honda Civics is a cruise control with a “set”, “resume” and “cancel” settings. The speed that is wanted has to be reset each time the vehicle is started.
2.2 SWOT Analysis
Smith’s Cruise Controls has some powerful strengths on which to build, but our major weakness is lack of brand awareness. The major opportunity is working with Honda Motor Corp. on the Civic and being able to expand to the other models. We also face the threat of the economy and future competition with other car companies. Strengths
• Industry experience and insight
• Practical product designers and workers
• Ability to grow into different models Weaknesses
• The dependence on Honda Motor Corp. capital necessary to grow the business
• The product is being offered only on one model (Civic) at start-up
• The small size of the company
Opportunities
• Participation within a growing industry
• Working relationship with one of biggest car companies in the U.S.
• The ability to save on fuel mileage when prices continue to rise
Threats
• A slump in the economy that could have a negative effect on consumer’s spending on new vehicles
• There will be future/potential competition from Chevrolet, Ford, or Toyota
• There will be future/potential competition from after-market companies
2.3 Competition
Smith’s Cruise Controls is forming its own market because programmable cruise control is not available at this time as an installed feature on vehicles. The only installed option available at this time is the cruise control currently on most vehicles that allows the driver to set the speed, cancel the cruise control, and resume the cruise control. The current option also includes the ability to speed up or slow down while utilizing the cruise control option without having to use the brake pedal or accelerator pedal. However, the driver must reset the speed each time they restart the engine.
The programmable cruise control option that is being marketed by Smith’s Cruise Controls will allow the driver to set two different speeds and have those preset settings available after the engine has been restarted. This will enable the daily commuter to be able to have the speed they desire with the push of one button. This feature will be factory installed on Honda Civic models in the year 2013.
There are different direct companies, such as Toyota, Chevrolet and Ford, who have cruise control available on their models. Honda Civics will be the first model to have the programmable cruise control, with the other models of Honda Motor Corp. to hopefully follow in the future years.
There is also an after-market programmable cruise control that is offered through an on-line company called Retro Vehicle Enhancement. There is no guarantee this product is available for all vehicles or that it will work properly when installed. The consumer has to rely on a third-party mechanic to install this product, and is not covered under the warranty of the vehicle.
2.4 Product Offering
Smith’s Cruise Controls is fulfilling the needs of the driver that commutes everyday and uses their cruise control. The programmable cruise control will allow the driver to store two different speeds that are regularly used, in order to access quickly when needed. According to the U.S. Department of Energy, “using cruise control on the highway helps you maintain a constant speed and, in most cases, will save gas.
The programmable cruise control will store the two different speeds in order to be retrieved later, whether the engine has been restarted or not. This allows the commuter to easily select the speed in which they travel most on their trip. This option is being presented on the Civic models, but hopefully will be in full swing on all models offered by Honda Motor Corp.
2.5 Keys to Success
The keys to success are to produce the programmable cruise control and implement on each of the Honda Motor Corp. models. The more models the product is installed in, the more products will be sold. The more products that are sold mean more consumers are using the product, as well as additional revenue for Smith’s Cruise Controls. In addition, Smith’s Cruise Control must ensure total customer satisfaction and meet the market demand. The product needs to be free of defects and operate efficiently and easily for the consumer. If these keys to success are achieved, it will become a profitable, sustainable company.
2.6 Critical Issues
As a start-up business, Smith’s Cruise Controls is still in the early stages. The first critical issue would be the economy and the ability of the consumers to purchase a new vehicle. The ability to save on fuel mileage is a selling factor, especially for those consumers that are driving around in a SUV, such as an Escalade or a Navigator.
A second critical issue is getting Honda Motor Corp. to incorporate the programmable cruise control in all models, not just the Civic. Once Honda has the option included on all models, it can expand to the Acura models as well. Once they are incorporated on all models, including Acura models, the path is paved for Smith’s Cruise Controls to increase their revenue and market area.
Another critical issue is to constantly monitor customer satisfaction, ensuring that the growth strategy into other models will never compromise service and satisfaction levels. Smith’s Cruise Control needs to communicate with their customers, and make sure the product is meeting their expectations and performing properly. This will enable them to continue into the other models.
3.0 Marketing Strategy
Smith’s Cruise Controls plans on utilizing the 2013 Honda Civic as the major means of advertising, because it will be a feature included on the model. Once they are introduced on the Civic, they will be introduced on the other models offered by Honda Motor Corp., such as the Accord, Odyssey, Element and CR-V.
Smith’s Cruise Controls will also utilize auto trade shows to get the information out about the new programmable cruise control option on the Civic. These trade shows will allow consumers, as well as other car companies, to check out the option available on the Civic. This information will likely be published in auto magazines and on web site blogs that detail the new options on each vehicle in the trade show.
The internet will be used to get the information out on the programmable cruise controls to anyone that has access to a computer. Smith’s Cruise Controls will have a web page with the information on the programmable cruise control installed on the Civic. It will give the information on gas mileage saved using the option, as well as a brief description to the operation of the product.
3.1 Mission
The mission of Smith’s Cruise Controls is to provide a product that saves gas mileage for Civic owners, especially with the prices of gasoline not getting any better, but reaching an all-time high. According to Newsoxy.com, “the national average is up in recent weeks and more drivers than ever before could soon be paying $5 a gallon.”
The customer for Smith’s Cruise Controls programmable cruise controls are the owners of the 2013 Honda Civic. This is the model the product will be introduced in the market. The Civic is already known to consumers to have great gas mileage, so adding the programmable cruise control is another way to add to the great gas mileage and make it even better.
The value to the owner of the Civic with the programmable cruise control is they are able to save the settings of the speeds they use the most. An example would be a commuter that works forty-five miles from where they live, and travel the same roads every day, with speed limits of forty-five and fifty-five. Instead of the driver having to reset the cruise control each time the speed changes, they have separate buttons to save the speeds and switch between the two. These speeds are also saved, therefore the driver does not have to reset it each time they start the vehicle.
3.2 Marketing Objectives
Smith’s Cruise Controls plans to maintain positive, strong growth in the auto industry as it is introduced on the Civic models. They plan to achieve a steady increase in market penetration as it is introduced on the other Honda models. They plan on using the auto trade shows and internet for the consumers to learn about their product.
During the first year, the market will consist of Honda Civics manufactured and sold in the United States. The second year Smith’s Cruise Control programmable cruise control will be included on the other model vehicles of Honda Motor Corp., including the Accord, Odyssey and Element. The third year, the product will be marketed to Acura vehicles and factory installed on their vehicles, in addition to Honda vehicles.
3.3 Financial Objectives
Smith’s Cruise Controls have set aggressive but achievable objectives for the first and second years of market entry. The first year we are aiming for the full market of 2013 Honda Civics through unit sales volume of 285,000. We are very confident in achieving this objective because we have the contract with Honda Motor Corp. to install the programmable cruise controls on all the Civics, hybrids included, starting in the year 2013.
Smith’s Cruise Controls second year objective is to launch the programmable cruise control feature on the other models offered by Honda, including the Accord, Odyssey and Element. We are confident in achieving this objective because we believe the Civic owners and engineers at Honda Motor Corp. will understand the benefits and value this feature allows the driver.
The third year objective is to implement Smith’s Programmable Cruise Controls in the Acura models. This will allow the company to continue to grow and be included on all models in the Honda Motor Corp. family and reach out to more consumers, which in turn creates more revenue for the business.
3.4 Target Markets
The auto industry market is steadily growing, as well as the price of gasoline. Consumers are doing everything they can in order to save money, and gas mileage is one they can control by utilizing options, such as cruise control. Smith’s Cruise Controls offers a programmable cruise control that saves the settings and speeds, even after the ignition has been turned off and back on. This is a convenience for drivers so they do not have to reset the speed when they either change their speed, or restart their vehicle.
In order to reach the target market, the general strategy used will be to incorporate the feature on all 2013 Civic models sold in the United States. The product will be used by the drivers of these vehicles as they commute to and from work, as well as any other time cruise control would be utilized. The programmable cruise control allows the driver to program two speeds, which stay in memory until they are reset. They do not reset after turning on and off the ignition.
There are over 112 million people that commute to work (Bowman, 2008) by either driving alone or carpooling with others, which could benefit from the programmable cruise control option. This would allow the driver to have two different speeds available at the touch of the button. The option also helps consumer gas mileage, which is a major factor when purchasing a vehicle these days.
The average age of the Honda Civic is thirty-five years old, and the average age of a Honda owner is thirty-eight years old (Porsche…n.d.). This will place the target age for the user of the programmable cruise controls to be in their mid to late thirties, which is also the age that is most concerned with saving money and gas mileage.
According to Timmins (2011), Honda plans to “sell roughly 1.25 million Hondas in 2012” and more in the coming years as the Civic is revamped and improved for the consumer. The addition of Smith’s programmable cruise control will be an added feature to the already gas efficient Civic, and other Honda models.
3.5 Positioning
The original cruise control is already a familiar product with consumers because it has been an included option on vehicles for many years now; therefore the programmable cruise control should be easy to understand and to operate for consumers. The cruise control is used by a lot of drivers, therefore allowing the driver to have multiple settings will only add to the convenience and usefulness of the original product.
The gap that is filled by having programmable cruise control as an option, instead of regular cruise control, is that it will allow the driver to set two different speeds and have those settings be saved. This eliminates the step of having to reset the cruise control each time it is used or each time you want to change speeds. This will be very useful to those drivers that commute back and forth, and want to consume on gas mileage.
The position of the programmable cruise control will be based on the uniqueness of the product, as well as the quality of the product. The ability to set two different speeds that stay programmed after the car is turned off and back on is unique, as well as having multiple speed settings. The quality of the product will be exceptional as well, with the backing of Smith’s Cruise Controls reputation. They will work properly every time and have a warranty of five years for any mishaps that may occur. They are also being installed on one of the most reliable and efficient automobiles that a consumer can purchase.
3.6 Strategies
The first marketing strategy has been to enter into an agreement with Honda Motor Corp. to have Smith’s Programmable Cruise Control installed on their 2013 Civics. They will promote the fuel consumption savings, as well as the convenience of the saved settings of two different speeds. The product will be featured in the advertisements of the Civics, as well as highlighted at auto shows and in auto magazines.
The information is also available on the Smith’s Cruise Control Web site, which will provide the product information and the availability of the product on Civic models, and eventually other Honda models. A lot of time and money will be invested in the site to provide the consumers with information needed and studies shown on the savings on gas mileage and the easiness in use of the product.
3.7 Marketing Mix
Smith’s Cruise Controls’ marketing mix is compromised of the product, promotion, place/distribution and price. The following section explains each part of the marketing mix in detail for the programmable cruise control.
Product. The brand name will be Smith’s Programmable Cruise Control. The features of the programmable cruise control are the two different speed settings and the ability to save the settings after the vehicle has been turned off. The quality will be very good on the programmable cruise control and carry a warranty of five years. Because the product will already be installed on the Civic when the consumer purchases the vehicle, there will not be and labeling or packaging involved.
Promotion. The promotion of the programmable cruise control will be done through auto shows and advertisements in auto magazines. It will be marketed as a featured benefit that is installed on the Civic model, and will be promoted with the ability to consume gas mileage for the average commuter. The product will be introduced on the 2013 model of the Honda Civic in the fall of 2012.
Place. The distribution channel for the programmable cruise control is on all 2013 Honda Civic vehicles that are produced. The product will be a key feature that is promoted on the Civic models. Due to today’s economy, consumers are looking for ways to save money, which also means saving gas and purchasing vehicles that can get them places and not cost a lot of money doing so.
Price. The price of the programmable cruise control is included in the price of the Honda Civic. It will not be an added price to the consumer purchasing the vehicle, like a CD changer or a moon roof. Once the 2013 Civic models have been produced, the programmable cruise control will be included on other Honda models as well. If the product is demanded by Honda owners prior to the purchase of a new vehicle, the option to have it installed at a local Honda dealership may be an option.
3.8 Marketing Research
Smith’s Cruise Controls is blessed with the good fortune of being able to work with one of the best car companies, Honda Motor Corp. It will be able to control all of the Honda Motor Corp. models within a few years, including the Acura division. Smith’s will continue to use customer surveys, focus groups and online research to find ways to improve and further market the product.
Customer surveys will be sent to all owners of the Civics to rate the performance and ease of controls. They will also survey other Honda model owners to get their input on the product that will eventually be installed in later models of what they own. Customer surveys are a good way to make sure the customers are satisfied with the product and if they are not, why and what can be done to change.
Focus groups will be used to stay current on the needs and wants of the industry, as well as competition in the market. The focus groups will be made up of consumers, Honda engineers, Honda Civic owners and Honda sales. This will bring in the ideas and opinions from all areas to improve the product.
Research, especially online research will be completed to stay current with the competition and to make sure the reception of the product is satisfactory. If they receive any bad publicity, they need to take the steps to correct the action and maintain a positive company image. They are not only representing Smith’s Cruise Controls, they are also representing Honda Motor Corp. because they will be exclusively installed on Honda vehicles.
4.0 Controls
This section contains the controls used to measure results and identify any problems or performance variations that may need corrective action. It will discuss the implementation, marketing organization and contingency planning Smith’s Cruise Control has for the business.
4.1 Implementation
In the first year of implementation of Smith’s Cruise Controls will have programmable cruise control installed on all Civic models manufactured and sold for the 2013 model. According to Holmes (2011), in November of 2011 alone, there were 17,133 Civics sold, which put them over the 200,000 sold mark so far for the year 2011.
The second year of implementation will have the programmable cruise control installed on all Honda models manufactured and sold for the 2014 models. This will include the Odyssey, Accord, CR-V, Element, Fit, Crosstour, Ridgeline, and Pilot. This will greatly increase the amount produced, and get the public more familiar with the product.
The third year will bring the programmable cruise control to the Acura family owned by Honda Motor Corp. At this point there will be full implementation of the programmable cruise control in all models manufactured and sold under Honda Motor Corp.
4.2 Marketing Organization
The author is the Chief Marketing Officer for Smith’s Cruise Controls. The support team consists of Andrea Beecroft, Sharon Bell and Paul Whiting. There is an abundance of knowledge and experience present within the support team, with combined sixty-five years of experience in marketing.
4.3 Contingency Planning
When difficulties or problems arise, the firm will handle them with efficiency, professionalism, confidence and in a timely manner. Smith’s Cruise Controls stands behind their product one hundred percent and will perform any actions necessary to fix any defects. They have a five year warranty that will cover any parts or labor needed to diagnose and solve the problem.
Smith’s Cruise Controls will continue to research ways to improve the programmable cruise control. They will also continue to find ways to increase production and revenue. Any risks that may arise will be researched thoroughly and analyzed by the support team. After research, any situations in need of attention will be addressed and corrected efficiently.
5.0 Conclusion
Smith’s Cruise Controls plans to implement the programmable cruise control in vehicles manufactured and sold by Honda Motor Corp. There is currently cruise control offered on Honda vehicles, however Smith’s Cruise Controls would allow the driver to create two different settings for speeds that are used frequently. Once the speed is set, the driver does not have to reset the speed when they restart the vehicle.
Smith’s Cruise Controls will market the prospective buys at auto shows, on-line through forums and most importantly through the advertisements of the Honda Civic. This feature will be a highlight of the 2013 Honda Civic and will be marketed for convenience and most importantly, to help reduce gas mileage.
This feature will be especially useful for the millions of commuters that drive the same roads every day. They can set the speeds and just press a button to change between the speeds, which would be relevant when traveling through smaller towns and speed limits decrease. This function is not only adding to the comfort of the driver, it also adds to the savings of gas mileage, which is an important fact in the minds of todays’ drivers.
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