marketing plan draft 3

8/2/2019 Marketing Plan Draft 3

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Automated Car Wash System Marketing Plan

Ali El Ahmar

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MM522 AnaheimKeller Graduate School of

Management

Ali El Ahmar


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Ali El Ahmar

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2.0Situation Analysis

Car washes have always been an available service for all kinds of people throughout the

world. From car enthusiasts to high school and college students and business professionals,

everyone seems to want to keep their car in prefect condition, so they tend to seek a car wash to

satisfy their needs. With the recent ongoing hard economic times, various businesses have been

suffering and were hindered from growth. According to an article from the business journal the

author states, After feeding $100 worth of gas into an SUV, motorists are less inclined to dig

deeper for a wash. Factor in worries about a credit crunch, declining home equity and higher

interest rates, and motorists will wait longer for that car wash (Johnson, 2008). Per the article

when tough economic times are lingering, then people tend to sway away from getting a car

wash since it is not necessarily a necessity to them.

For an already existing family car wash that offers 100% honest and clean hand-wash car

service, it has been really tough to attract as well as keep customers. With the addition of an

automated car wash system which is simple and fast yet very effective, the family car wash

expects to increase their revenue as well by attracting a new customer base as well as

maintaining them. Since the economic times are tough, this addition of an automated system will

offer high quality service that is affordable and fast. The operation currently offers a service that

requires man power to be carried out. The new automated service will be a bit more costly only

because the system will not requite any human power to operate. It will be automated yet self

serve for the customer at the same time. While adding this new service, the family car wash

wants to make sure to maintain the loyalty of existing customers for the hand wash service, as


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well as attract a new customer base for the automated system. This will also give each customer

an option of which service they would like depending on how fast they need the car to be ready.

2.1Market Summary

The target market for the hand was car service is an already existing base that ranges

from car enthusiasts that love to give attention to every single details of their car to high end car

owners that also want their car to be taken care of. The new addition of an automated system will

target high school and college students, business people, and professionals in the car industry

which all do not really have the time of the day to wait for a longer process of the hand wash

service. These people want to get in and out as quickly as possible, while at the same time

receiving excellent service. The main focus will be saving time and receiving a service that has

very competitive prices and is efficient. In the surrounding area, there are a few high schools

and colleges within a 20 mile radius which will attract people who want to keep their cars clean

from snacks and foods or dirt from various school events such as sports and what not.

Market Demographics:

- The primary target is Irvine, California.- A 20-30 mile radius will require services of this car wash.- The total population of Irvine is 212,375 (Census 2010)- Average household income is $111,455.

2.2SWOT Analysis


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Strengths

- Company already provides a hand wash car service, which means the background ofthe owners and employees is very strong and knowledgeable.

- The location of the car wash which will be in the same vicinity as several highschools and colleges as well as other car shops.

- Strong knowledge of information systems which will allow integrating easy servicesall across the automated system.

- The area where the business is located has many high end car owners due to thesocioeconomic status of many of the families and individuals in the area.

Weaknesses

- Installing the automated system and making it fully self operational will be pricy.- Facility is old and may need renovations which will also add to the costs.- Struggle to maintain the existing customer base of the hand wash service while

adding the automated service.

Opportunities

-

Implementing the automated system will ensure faster services which could result

into more customers per day going through.

- Being so close to schools and other car businesses will attract loyal customers.- Higher end cars will be serviced due to high income residential areas.


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- Providing deals and coupons in conjunction with other car businesses that are local.Threats

- Financial issues that could arise from the implementation of the system which willlead to possible loans owed to the bank.

- Tough economic times could slow sales down significantly.- New city regulations that will be imposed when building the new automated system

could affect the service.

Competitive Matrix

Factor My

Company

Gas Station Mannys Car

Wash

Auto

Detailing

Center

Dual Services (Hand/Auto) YES NO NO NO

Number of Bays 5 1 3 3

Waiting area / Free Coffee YES NO NO YES

Attendants 4 0 1 2

Pricing $7-10 $4-6 $10-12 $12-20

The following competitive matrix shows the comparison between the family car wash and three

other competitors in the same region. As shown in the illustration, my company will offer dual

services unlike any other nearby competitor as well as the most number of bays which will allow

for a higher volume of cars to go through each day.

2.3Competition


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The current competition does not seem to be very overwhelming since there are only

three other car washes that are located within a 30 mile radius of the business, and none of them

currently offer both hand service and an automated service at the same time. This will be

advantageous to the family car wash since people do not seem to like to travel a long distance in

order to get a car wash which actually makes sense especially when gas prices are at an all time

high. To distinguish this car wash from the competition, dual services will be offered based on

what the customer prefers. The main idea of the marketing plan is to ensure speedy services and

excellent customer service to go along with it. The automated system will allow the customer to

easily come in and out of the car wash within minutes. The customer does not even have to be

outside of the car during the process of the wash in the automated system. With the availability

of both services, the family car wash will be able to have a distinctive competitive advantage

over other similar businesses.

2.4Product (Service) Offering

Automated car washThis service will be added on to the existing service of a hand

wash. This service will provide a self serve automated system that will allow customers to drive

through a tunnel, insert their money and drive through the process while the system thoroughly

washes their car. The system will be using high pressure guns and foam brushes for the soap

application. At the beginning of the service, the customer will make his/her payment and then

proceed through the tunnel which will first rinse the car thoroughly and as the belted system

moves the car through the tunnel, different washing methods will be applied to the car. The price

for the basic automated car wash will be around $7-$10 per customer. Of course, higher end

services such as applying wax and detailing will cost a bit more than the basic car wash.


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Customers will have the options of choosing what type of car wash they would like at a kiosk in

the front of the tunnel. According to a study published in Professional Detailing Tips,

Automatic washes shine in their speed and convenience. Automatic wash simply requires

getting into your car and visiting your local car wash, an automatic wash will take only 5-10

minutes to complete, whereas a hand washing, even when rushed, will take between 20 minutes

to an hour or more (Tips, 2011).

2.5Keys to Success

The following concepts are keys to success:

- Customer satisfaction and loyalty.- Excellent and fast automated car wash service.- Meeting market demand and exceeding competition at all times.

2.6Critical Analysis

Critical issues faced by the family car wash:

- Maintaining marginal growth for the first six months to a year before considering anyprice adjustments.

- Continue to increase customer base and build loyalty.-

Become the leading car wash service in the region.

3.0Marketing Strategy

The family car wash will introduce a new automated car wash service that has been

missed in the local area for some time. In order to introduce the service properly, the company


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will implement an aggressive marketing strategy that will focus on attracting new customers and

presenting them with value. The marketing strategy used will have various channels of marketing

such as local advertisements, a website, newspaper ads, and other promotions and coupons that

will likely attracts the customer. Some of the main points that will be addressed in the marketing

strategy are:

- Attract and maintain loyalty of new customers.- Become the only top-quality service in the region.- Develop brand equity and maintain a large customer base.

3.1Mission

This family car wash will be providing high quality automated car wash service in

addition to the already existing hand car wash service. By doing so, the company wishes to

satisfy the needs of many customers who require a speedy and quality service that is priced very

reasonably. The company will strive to create value by allowing the customer to choose between

the two different services that we provide depending on the customer type. Providing dual

services not only will allow the company to become competitive and work its way to become a

top brand, but it will also help create value for many customers.

3.2Marketing Objectives

- Establish a customer base for the automated service that matches or exceeds theexisting one for the hand service.

- Increase market share every year.- Maintain loyalty of customers by keeping an 8% average of repeat customers.


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- Seek to develop a brand that is associated with high quality service along withgreat value for the customer.

3.3Financial Objectives

- Increase profit margin by 10-20% with the addition of the new service.- Maintain a profit margin that exceeds costs at all times.- After three years, attempt to decrease overhead costs.- Incrementally increase price after 3-4 years once the service has been fully

established.

In order to break even in terms of finances, I have calculated a break even analysis as follows:

The average set price per car wash is $8.00. Unit contribution equals to $3.00, in which all the

variable costs such as manufacturing and servicing are considered and subtracted from our

selling price which is $8.00. In order to perform the break even analysis, we take the following

formula: BE = Fixed cost / Price Variable Cost (Unit Contribution) which translates into BE =

10,000 / $5.00 =2,000. Our business must sell 2,000 car washes in order to break even. Anything

above that level is considered as profits.

3.4Target Markets

The target market for the new automated service will include high school students, local

business owners, college students, and business professionals who do not really have the time to

obtain a hand car wash service. So, there is going to be a wide variety of customers available to

target for the automated service. The main focus will be on targeting customers who want to save


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time and still receive the highest value possible in return. There are about 4 different high

schools located within the area of the car wash and about 3 elementary schools. This is

significant the geographic location of the car wash service will attract the high school students

who want to keep their car clean at all times and would like to show it off. On the other hand,

parents who are picking up their kids from elementary schools might frequent our car wash to

keep their car cleans from after school events and sporting events. Some other available

resources will be the many business professionals in the corporate world of Irvine. Irvine is

known to be a home to many corporations and therefore there are many busy individuals that will

require a quick service. It is important to note that according to the Census, the average median

household income in Irvine is $111,455. This stat tells us that the population in Irvine is

relatively of the higher end of society which translates into luxury car owners. Luxury car

owners want their car to look clean at all times and they are willing to spend top dollar to

maintain the clean look. Additionally, there are the local car dealerships and car business owners

that want to keep their fleets clean at all times to reflect the image of their company. These are

also considered a very good target because they will be looking for fast and cost effective

services that they will perform on a regular basis. The following categories sum up the target

market:

- High school and college students in the area that require frequent car washes andare usually tight on money.

- The Irvine families that hold an average yearly income of $111,000 plus that arewilling to pay top dollar for their cars.


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- The busy business professionals that require fast service because they areconstantly busy throughout the day.

- Other local businesses that have car fleets that they would like to maintain at alltimes. These can potentially become weekly customers or daily.

3.5Positioning

The family car wash will position itself as a high-quality dual car wash service that will

offer the best of both worlds in the Irvine and Orange County area. We will achieve this position

by being highly competitive in the current market. The competitive advantage that the family car

wash will have is the availability of dual services unlike any other car wash in the area. This will

Target Market Sales Potential

Students

Irvine Families

Business Professionals

Local Businesses


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create a large customer base for the company and will maintain customer loyalty based on the

customers preference. The operational team comes from a very experienced background as well

that is savvy with auto services in general as well as exceptional customer service.

3.6Strategies

The family car wash seeks to establish a premier brand name that provides high quality

and continues to grow exponentially in the market. The marketing strategy will create customer

attraction and awareness, a new customer base for the automated service, customer loyalty and

great value to the customer. The company will distinguish itself by offering both hand and

automated car wash services. By doing so, the company will create a lot of traffic on a daily

basis. With 5 operating automatic bays, the flow of traffic through the car wash will be simple

and fast which allows for more cars to go through per day which in turn creates more revenue.

The company will continue to focus on speed and meeting customer demands, By allowing the

customer to come in at the time they desire and offering speedy service that is affordable and

offers value will create a more personal transaction and relation with the customer. This way the

company will present an image that they are not after pure profits, however they care about the

customer and the relationship between the customer and the family car wash. The company will

seek to invest with local businesses as well to establish a promotional technique that will offer

coupons for us and other businesses as well so both could benefit.

3.7Marketing Mix

PricingThe tunnel system that will be implemented is very efficient and profitable. The cost of

implementing such a system will be approximately $210,517.14 and it will allow to wash, wax,


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seal, tire shine and dry up to 100 cars per hour (Sonnys, 2011). Prices will vary based on the type

of package that the customer wants for the automated system. An all inclusive wash will run

about $10 which will include a full wash, wax, seal, tire shine and dry. There will be other basic

packages that will offer a basic car wash and dry using soap that will run about $7. The all

inclusive car was will be known as the Ultimate Car Wash and the Basic Car Wash. To separate

ourselves from the nearest competition, we have kept our prices at $2 under by offering $10 as

opposed to $12 at other places. We also plan on implementing packages for loyal customers that

will rack up points and receive rewards and discounts based on the points they receive.

Promotion The family car wash will work on constantly promoting the services we offer by

spreading the word around through various advertisements and word of mouth. We will begin by

offering cheap prices and discounts on the opening week of the service to attract the customer

and give them a taste of what our service offers. We will also work on cross marketing plans

with nearby shops such as Subway, Dairy Queens and PepBoys. Agreements will be made with

these shops to distribute cards and discounts for our car wash service. We will also give

dealerships an offer where first time buyers will receive a free car wash after a one month period

of their purchase. We also plan on hosting a car wash event for high schools and colleges once

per quarter to help establish a connection with students. All of these promotional intitiatives will

cost a minimal amount, however the potential returns could deem to be very profitable in the

long run.

Promotional Budget

Website Maintenance $50.00


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Promotional Coupons

Nearby Businesses $200.00

Gas Station $100.00

Public Passes $30.00

Sales Promotions (Operating Costs)

Nearby Businesses $4,500.00

Gas Station $2,250.00

Giveaways

Public (30 cars a months) $2880.00

Local School Events $4,000.00

Total Promotional Budget $13,960.00

Distribution Since this is a service and not a product that can be distributed, the family car

wash will continually work on distributing promotional items throughout the year. We will also

establish an online website where customers can go for more information and pricing.

3.8Marketing Research


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Market research is essential in order to obtain the ideal customer and begin targeting

them. The family car wash will conduct observational research initially where the owners will go

out to several car washes and observe what type of customers and cars visit the place and how

frequently. All of this data will be recorded and compiled into a report format. Another form of

market research will be surveys that the family car wash will conduct. These surveys will be

handed out to the target market and then analyzed when returned. With the combination of all of

this data, the family car wash will be able to narrow the target market and learn more about the

needs and wants of the customer base.

marketing plan draft 3

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