Target Market & Competition

Target Market

Demographic Description

The general customer is characterized by one or more of the following features: active, healthy, environmentally aware, fun seeking, spontaneous, keen on experimenting or eager to learn.

Furthermore, the target market can be divided into three categories of the services offered:

· Student bike rental

· Guided tours and rental for Segway, tandem, bikes

· Corporate and private event rental and entertainment

Student bike rentals are geared to the needs for transportation of male and female students in Koblenz in the age range from 18 to 30 with a limited budget and low income range. Foreign students who are only staying for a limited time, or students who originate from further away than the surrounding federal states and are especially likely to be attracted by the company’s products. Students are also mainly the target market for skate rentals.

Guided tours and rentals generally encourage people of all age groups to be active in the outdoors. However, research revealed that higher priced guided tours and Segway rentals, as well as bike rentals in the region, are most likely to attract and satisfy the needs of affluent tourists and locals at the age of 40 to 70 (Works). Furthermore, doing surveys about the characteristics of bike tourists in Rhineland-Palatinate revealed that they are mainly between 35 and 65 and white-collar worker or retired with a high level of education (Europaeisches Tourismus Institut an der Universitaet Trier GmbH). Concerning nationalities, approximately one fourth of tourists in Koblenz are from foreign countries, mainly from English-speaking (USA, UK) and the BENELUX countries (Koblenz city council - statitics department).

Corporate and private event rentals and entertainment programs are developed for the midsize and large companies as entertainment on office parties, and team building options on private or office parties and staff outing. Advertising opportunities on Student bikes will be offered to local businesses that provide student related services or products.

Geographic Description

The main target markets are locals and visitor of Koblenz and the narrow surrounding area. The company will be present once a month for about three hours on the two campuses of the Universities of Koblenz to promote bike rental options.

An internet presence in German and later also in English and French as well as strategic marketing partnerships with the tourism board of Koblenz, the German and federal bike associations and other companies will also announce the company’s services to the target group in the wider geographical area.

Lifestyle and Psychographic Description

College students are usually part time workers with a low budget and high need for entertainment and leisure activities. Budget restrictions and high gas prices force students to use the public transportation services of Koblenz. However, a bike would give them more flexibility to commute between downtown and the University. They frequently use the web for information and communication services. Social networks such as “Studivz“, “Facebook“ and “Wer-Kennt-Wen“ are pages frequently visited. Targeted students are in the age of 18 to 25, trend oriented, fun seeking, environmentally concious and responsible. It is therefore important to offer rental bikes that are in trend but also practical for there daily transportation needs.

Tourists visit Koblenz on the way through the Rhine or Mosel valley and stay only for a day or overnight guests for an average of two days in the city; tourists interested in renting a bike need a flexible offer that allows them to leave there bike wherever they are, without having to come back to the company’s office.Furthermore, they are cultural interested and are increasingly demanding for unique experiences on their holidays. Seg and Cycle the City will meet this demand by offering an alternative to walking city tours. Tourists also want to take pride in telling friends about their vacation experience. A Segway city tour is unique and will enhance their experience and fulfil their desire to improve their status among friends. Fascinating historical buildings and sights combined with new technology is what they are looking for. The description of early eagers describes this segment well. They are also interested in culinary experiences, visiting museen and castles, tasting local wine or doing a boot trip on the river. These aspects will be considered in the choice of marketing channels and partners.Moreover, bike tourists are fun-seeking, active, environmentally concious and live a healthy lifestyle. A survey conducted among bike tourists in Rhineland-Palatinate revealed that the purposes for using a bike on vacations are: fun factor, being healthy and stay fit, it is convenient and it conserves the environmentand that decisions are mainly based on recommendations of friends and family, brochures, online and by visitor centers. Bike specific magazines are less popular (Europaeisches Tourismus Institut an der Universitaet Trier GmbH). Locals targeted are looking for activites to fullfill their available leisure time and spend their weekend with family and friends.

Targeted companies are environmetally conscious, value team work and seek to provide a good working environment for employes to improve their image in the labour market and among partners by providing unique entertainment next to business issues. A successful office party and a content workforce is of high priority for them. Potential customers for bike advertinsing are companies that offer products and services for students and seek new possibilities to set themselves apart from the competition and provide in trend advertising that boosts their image for the younger population.

Purchasing Patterns Description

Students have restricted budgets and will welcome an alternative to purchasing a bike. They are likely to continue the rental contract after one month for this reason but interrupt rental during the winter months. Students are not likely to rent for longer than one year as a cheap purchasing price will be offered to them after that time or they move away. Purchasing decisions will be mainly made with the start of a semester, when they discover the need for a flexible transportation to commute between the city burdens. The rental service will be announced on an ongoing basis through flyers and posters on campus, emails as well as physical presence once a month to offer maintenance services on campus.

All of our products are mainly created used in the outdoors to get around the city or enjoy a ride along the riverbank.

The typical buying patterns of rental customers is to either search on the internet for offers or call different bike or outdoor shops and ask for rental equipment. Tourists ask the hotel employees or their host for advice or call the local tourism board for help. Convenience and availability are typical variables that customers are concerned with.

Tourists will purchase the company’s services once and are likely to come back for their next visit as management is committed to satisfy customers to the highest, through providing quality customer service. Frequency is expected to be an average of a year due to yearly repeated visits for events. Purchasing decisions for rental equipment will be made no longer than one week in advance whereas city tours are expected and recommended to be reserved at least one months in advance due to limited capacities. All services can be reserved via email, in person or on the phone. Accepted methods of payment are cash and money transfer in advance. For the second year the management will rent a POS System to be able to accept VISA and Master Cards.

Buying Sensitivity Description

Students are especially sensitive to prices and can be captured through special offers and advertising. Image is important to attract a younger target segment. Due to limited mobility, a central location and frequent presence on campus will increase sales.

Tourists value quality of experience and will be attracted to product bundling and packaging, such as wine testing in order to be able to explore as much as possible of the city in a short time with the least amount of involvement in the planning process. Therefore, people are usually less price sensible on vacations.

Location is also an important factor as it encourages short term decisions and the opportunity to start their exploration tour right away. Furthermore, a pickup service for bikes will increase their flexibility and satisfaction. Quality customer service and personal relations is another important success factor in order to enhance the clients’ experience.

Market Size and Trends

Two universities are located in the city of Koblenz. The largest is the University of Koblenz with 6,257 students in 2007/2008 and the University of Applied Science has 5,885 students in 2007. The following statistic shows the origin of students at the University of Koblenz. Students likely to purchase our services are those who originate from further away than the surrounding states as they are less likely to already own a bike and take it with them. From the statistic below it is estimated that 36.6% (foreigners plus students originated from further away than surrounding states) of total students are potential customers for the student rental program (Statistisches Landesamt Rheinland Pfalz).

The University of Applied Science in Koblenz reported a number of around 25 foreign students (Schellenbach). The company also estimates 5% of the 5,885 students to be potential customers. Consequently, management revealed a total sales potential of 2,604 students.

The city tour and rental market in Koblenz can be segmented into:

1. Overnight visitors – the number of guests that accommodations in Koblenz have reported (283,174 in 2007) spending around € 56,193,418.

2. Day-trippers: “Endbericht Mittelrhein 2007” for Koblenz calculates the number in accordance to the “German Economic Institute for Tourism (DWIF)” by multiplying inhabitants (106,024) with the number of trips per year (36). The average expenditure of day-trippers is calculated to be around €28 per day. Therefore, the company estimates that only 5% of all day-trippers are likely to purchase Segway tours and 8.5% for other rentals (Forschungskreis Tourismus Management Trier e.V.).

Market Analysis

Market Potential Segway Market Potential Bike/Skate/Tandem

To compute the total sales potential for Segways the following segmentation factors are being applied: Age, Interest and Income

According to a survey among Tourists in Germany (domestic and foreign) conducted by Qualitätsmonitor Deutschland-Tourismus (results are attached in appendix) a 45% of visitors in Germany are between 40 and 70 and 71% are interested in sightseeing (Europaische Reiseversicherung AG und DTZ). The annual report for Germany states that around 40% of all german inhabitants have an income of more than 2000 ($2723) Euro per month (Federal Statistical Office).

Consequently, the estimated number of potential customers for guided Segway tours or rentals is 59,726 .

To compute the total sales potential for bike/tandem and skate rental the following segmentation factors are being applied: Age (same number as above) and Interest in outdoor activities during vacations.

Besides 13% who like to go on an all bike trip for holidays (not included in target market) 24% of all vacationers in Germany like to be active or do sports on holidays (Europaische Reiseversicherung AG und DTZ). Applied to the total market potential, management estimates a number of 71,805 potential customers for bike/tandem and skate rentals/tours per year.

For 2011, when the National Garden Show takes place in Koblenz, the committee that is in charge of the organization estimates to attract around 1.75 Mio. visitors for the period of April to October 2011. Consequently, management estimates to be able to double sales to tourists in the second year, due to increased advertising expenditure for that year and equipment purchases.

The market for event entertainment is comprised of companies with a size above 10 employees and based on the following graph that shows the number of respondents to a survey conducted by the chamber of commerce in Koblenz. A number 552 potential customers are estimated. Management also expects a growth rate of 2% every year due to increased knowledge and advertising efforts by the company (IHK Koblenz).

Total Visitors to Koblenz = 4,102,045

Total market potential = 664,860

Total market potential = 474,017

Number of number of % of

Employees responding companies responding companies