Marketing audit and competitive market
Marketing audit and competitive market
Financial markets homework task
single space
8 pages
** as example
Mozambique
Market Audit-Competitive Analysis
Table of Contents I. Executive summary …………………………………………………………………………………………………………………… 4
II. Introduction ……………………………………………………………………………………………………………………………. 4
III. The product ……………………………………………………………………………………………………………………………. 5
A. Evaluate the product as an innovation as it is perceived by the intended market ……………………………. 5
- Relative advantage …………………………………………………………………………………………………………………… 5
- Compatibility …………………………………………………………………………………………………………………………… 5
- Complexity ……………………………………………………………………………………………………………………………… 5
- Trialability ……………………………………………………………………………………………………………………………….. 5
- Observability …………………………………………………………………………………………………………………………… 5
B. Major problems and resistances to product acceptance based on the preceding Evaluation ……………. 6
IV. The market …………………………………………………………………………………………………………………………….. 6
A. Describe the market(s) in which the product is to be sold …………………………………………………………….. 6
- Geographical region(s) ……………………………………………………………………………………………………………… 6
- Forms of transportation and communication available in that (those) region(s) ……………………………… 6
- Consumer buying habits …………………………………………………………………………………………………………… 7
a. Product-use patterns ……………………………………………………………………………………………………………….. 7
b. Product feature preferences ……………………………………………………………………………………………………… 7
c. Shopping habits ……………………………………………………………………………………………………………………….. 7
- Distribution of the product ……………………………………………………………………………………………………….. 7
a. Typical retail outlets …………………………………………………………………………………………………………………. 7
b. Product sales by other middlemen …………………………………………………………………………………………….. 8
- Advertising and promotion ……………………………………………………………………………………………………….. 8
a. Advertising media usually used to reach your target market(s) ……………………………………………………… 8
b. Sales promotions customarily used (sampling, coupons, etc.) ……………………………………………………….. 8
- Pricing strategy ……………………………………………………………………………………………………………………….. 8
a. Customary markups …………………………………………………………………………………………………………………. 8
b. Types of discounts available ……………………………………………………………………………………………………… 8
B. Compare and contrast your product and the competition’s product(s) ………………………………………….. 9
- Competitors’ product(s) ……………………………………………………………………………………………………………. 9
a. Brand name …………………………………………………………………………………………………………………………….. 9
b. Features …………………………………………………………………………………………………………………………………. 9
c. Package …………………………………………………………………………………………………………………………………… 9
- Competitors’ prices ………………………………………………………………………………………………………………… 10
- Competitors’ promotion and advertising methods …………………………………………………………………….. 10
- Competitors’ distribution channels ………………………………………………………………………………………….. 10
C. Market size ……………………………………………………………………………………………………………………………. 10
- Estimated industry sales for the planning year ………………………………………………………………………….. 10
- Estimated sales for your company for the planning year …………………………………………………………….. 11
D. Government participation in the marketplace …………………………………………………………………………… 11
- Agencies that can help you ……………………………………………………………………………………………………… 11
- Regulations you must follow ……………………………………………………………………………………………………. 11
VI. Sources of information ………………………………………………………………………………………………………….. 12
VII. Appendixes …………………………………………………………………………………………………………………………. 13
VII. Appendixes …………………………………………………………………………………………………………………………. 16
I. Executive summary Eco-Biques has the opportunity to fit into a market where little competition exists. Despite
having a product that extremely compatible as perceived by the intended market, Eco-Biques
must overcome the resistance by those who prefer domestically and locally made products. The
bikes will be exported to all of Mozambique’s extremities-including both urban and rural
locations. Transportation and communication systems are not well executed in the rural areas of
the country. But with most of the population living in extreme poverty in those areas, it will be
essential for Eco-Biques to distribute its product to those rural destinations. Typically, these
types of products are found in retail stores in urban areas which are usually sold at full price
without any customary markups or sale promotions. The radio is the means of advertisement that
is usually used to reach this typical target market as it can reach members of the population that
live in rural areas. Most Sub-Saharan Africans tend to be loyal to specific brands and are less
likely to try new products than their northern counterparts. The major competitor in the market is
a local company called Mozambikes that has a two part business plan which reflects its pricing
scheme. The competitor has adopted a unique advertising medium where businesses can
purchase advertising space on a Mozambike. Therefore, it has two clients: the businesses
wishing to buy advertising space and clients interested in purchasing the bikes. The market has
potential to be extremely large as 70% of the population still lives in rural areas where
commuting is extremely difficult. If Eco-Biques capitalizes on the open market share it could
have the potential to sell well over 4000 units- which would significantly affect the industry sales
for that planning year. With the help of government agencies such as USAID and the USCS,
Eco-Biques will have the means and the knowledge to be a successful force overseas in African
territory.
II. Introduction Mozambique is one the poorest counties in the world. As a result, a majority of the country is
unable to afford a motorized vehicle and the maintenance of the costs to upkeep those vehicles.
Daily trips appear to be more and more difficult, as most Mozambicans do not have direct access
to health and education systems, in addition to other important establishments. Therefore, most
of the population is forced to travel by foot. These trips by foot can exceed distances over many
miles and kilometers. A bicycle is a realistic solution that would make daily mobility for
underprivileged citizens much easier. Bikes are evidently much cheaper than motor vehicles and
a faster alternative to traveling by foot. Eco-Biques is looking to make its impact into the
industry to provide a safe method of transportation to the people of Mozambique. With that said,
Eco-Biques goes far beyond than simply providing an alternative means transportation, it is a
venture that promotes a new healthy lifestyle that will change the lives of both urban and rural
Mozambicans.
III. The product
A. Evaluate the product as an innovation as it is perceived by the
intended market
- Relative advantage Eco-Biques are extremely advantageous over its alternatives: expensive motor vehicles, long
distance walking, and public transportation’s scarcity. Eco-Biques are a low cost efficient means
of transportation that will facilitate the day to day lives of both children and adults. The bikes are
an eco-friendly means of transportation while all of its materials come from recyclables- the
carbon footprint is relatively low.
- Compatibility The typical income of the people of Mozambique is extremely low which translate to a rather
low budget for secondary necessary expenses. Therefore, Mozambicans are interested in items
that do not have added expenses after the initial purchase. Eco-Biques are compatible due to its
low maintenance form of transportation as opposed to motor vehicles which requires gas, oil
changes, and other tedious expenses. In addition, Eco-Biques will provide a relatively fast
means of transportation when compared with walking long distances. The people of
Mozambique will be able to benefit from a quicker mode of transportation.
- Complexity Eco-Biques requires a small learning curve to use the product. It is a rather simple product that
children will also be able to master. The bikes are low maintenance products that also require
little service after the initial purchase besides low cost repairs.
- Trialability There is a large degree to which the product can be experimented during a limited basis. There
should be at least two different trials where one is focused on the urban population while the
other should be focused on the more rural areas within the country.
- Observability The bikes are also compatible with Mozambicans as the products can be used as a dual purpose:
transportation and a leisurely activity. Some of the people of Mozambique may consider Eco-
Biques as an enjoyable pastime for both children and adults. The primary leisure activities are
sports within the country of Mozambique, but bikes may become a new means of entertainment
that both wealthy and low income population can enjoy.
B. Major problems and resistances to product acceptance based on the
preceding Evaluation Mozambicans may be reluctant to the initial investment despite its low cost. The Mozambicans
may see the investment as an unnecessary item because they already have adopted a preferred
means of transportation: walking. Marketing the item correctly to address this issue will be a key
factor when introducing the product to the market. Another issue that may arise is the lack of
knowledge about the brand. Perhaps some resistance may occur simply because Eco-Biques is
not a domestic product- being an American made product could affect the potential likeability of
the brand.
IV. The market
A. Describe the market(s) in which the product is to be sold
- Geographical region(s) Eco-Biques will be sold in both the urban and rural areas of the country. The primary urban
location will be in Maputo, the nation’s largest city and capital. Maputo is located in southern
part of the country. It is a port city on the Indian Ocean, which will facilitate exportation. The
city is approximately 120km (75 miles) from the South African border and 80km (50 miles) from
the border of Swaziland. Because Maputo lies so close to South Africa, the city acts as the main
centre for industry and business. Four-fifths of the population still lives in rural areas, these areas
consist of limited access to adequate roads, and education and health systems. Therefore, low
cost and easy to maintain bicycles must be marketed to these regions. The further north of the
country, the higher the prices rise because providers will pass all transport costs to the low
income consumers. As a result, Eco-Biques will focus most its efforts on the northern and
southern geographical locations.
- Forms of transportation and communication available in that (those)
region(s) Many forms of transportation is available in the urban area of Maputo, those of which include
the following: cars, airports, buses, ferries, trams, ports, “tchopelas” (three wheeled bikes), and
conventional bicycles. The rural areas have a much more limited means of transportation. Rural
areas have less adequate road conditions that are not suitable for trucks and cars.
Telecommunications in Mozambique consist of radio, television, fixed and mobile telephones,
and the internet. Thought the latter, is only used for the wealthy and the education systems,
therefore it is not conventionally found in rural areas. The radio is a vital form of communication
as it is a widely used tool in both urban and rural locations. Mozambique’s landline network was
heavily damaged during the civil war and as a result is very limited even the most urban areas.
Mobile-cellular coverage includes all the main cities and primary roads, but lacks coverage in
rural areas of the country. Few rural individuals can get a mobile signal while even fewer can
afford the actual mobile phone.
- Consumer buying habits
a. Product-use patterns Most purchases are bought on a peer need basis; therefore impulse buys are not that common as
most consumers are price conscious. With that said, products are not wasted and are used to its
maximal potential.
b. Product feature preferences Quality products are highly important feature for the average Sub-Saharans African. Despite the
abundance of informal retail across the entire country, urban Africans consumers enjoy
fashionable items and clothing. In a recent conducted survey, 58% of respondent said that they
choose their clothing based on fashion, and 43% feel it is important to follow the latest trends.
c. Shopping habits Sub-Saharans Africans tend to be loyal to a specific brand while North Africans are loyal to a
selection of brands. Only 35% of Sub-Saharans are willing to try new products or services in
contrast to North Africa, where 43% are willing to explore new items. Like most Africans,
Mozambicans are very price conscious and spend a lot of time searching for the lowest-priced
item when shopping. So, it must be the right brand for the right price. Only 12% of the adult
population use formal bank products and services and 77% of the bank population live in urban
areas.
- Distribution of the product
a. Typical retail outlets The product is typically sold at retail locations in urban areas such as the nation’s capital. Rural
retail locations for this product are not customary.
b. Product sales by other middlemen Middlemen typically sell used or second-hand bikes through classified advertisements on the
web or in newspapers-typically in urban areas.
- Advertising and promotion
a. Advertising media usually used to reach your target market(s) The radio is the primary means of advertising medium for the typical target market since most
Mozambicans own a radio and the message can be communicated throughout the rural areas.
The illiteracy rate is very high in Mozambique; as a result print advertisements may not be the
most cost effective means in terms of spent advertising dollars. Most of Mozambicans do not
own television sets- especially limited in rural locations. But, it is a useful tool to reach the urban
target market. Word of mouth is very effective in Mozambique and other Sub-Saharan countries.
Nearly 50% of Sub-Saharan Africans and 81% of North Africans gather information from
friends and family. Therefore, positive product recommendation through word of mouth is
crucial and a necessary means of advertisement. Most buying decisions are made at the point of
purchase. As a result, in store advertising is extremely important- 58% of consumers use in store-
advertising to gather information on clothing.
b. Sales promotions customarily used (sampling, coupons, etc.) Sales promotions, including sampling and couponing are not frequently, or if ever available in
this market. These products are typically enjoyed at full retail price.
- Pricing strategy
a. Customary markups Some companies in this market are charities in which they donate bicycles to people in need.
However, there is an established market with a for profit organization that sells at reasonable
prices due to their mission statement and company values .The bicycles are sold at reasonable
prices where the consumers can afford the product while the company can make a small profit.
b. Types of discounts available Discounts are not typically available for these products; however, a competitor offers bicycles at
reduced rates for bikes with special features that will be described below.
B. Compare and contrast your product and the competition’s product(s) Eco-Biques will be made of recyclable materials. Companies from the local Atlanta area will
have a large impact on the movement, as most of the recyclable will be donated from Atlanta
companies. Basket features will also be available on every model to efficiently transport goods.
As a result, Eco-Biques will have the advantage over its competition in terms of dollars spent for
purchasing materials. In addition, Eco-Biques will have a rental option where customers can rent
bikes on peruse basis. Bikes can be rented for a days, weeks, and months a time for those who do
not wish to commit to an entire purchase.
- Competitors’ product(s)
a. Brand name Mozambikes is the only operational bicycle producer in Mozambique. However, Bike Town
Africa is a U.S based company that delivers more than 2,000 new, custom made bicycles to
health care workers in sub-Saharan Africa. . Bike Town Africa donates bicycles every year to
health care workers that are particularly involved with HIV/AIDS related work, orphans, and
farmers. However, as on July 2013, the last update on BTA’s website and Facebook was over a
year old and all the links of its projects are no longer active. Based on that information, it could
be possible that BTA is no longer active in the industry so the focus will be on Mozambikes.
b. Features Mozambique has a duel income opportunity. Not only can customers buy bikes but businesses
can also advertise on Mozambikes for a small fee. Advertising with Mozambikes is less
expensive than television and radio ads. For the cost of one full page advertisement in a
newspaper, the business could advertise on 18 bikes for the same cost. Mozambikes handles all
the logistics to sell the bicycles that the advertised brand is promoted throughout Mozambique.
In addition, Mozambikes has key features that provide high quality materials fit for the country’s
climate and roads. Mozambikes have stronger components including aluminum rims, reinforced
tires, comfortable seats, and rubber handlebar grips, a rear carry structure, and dynamo light and
rear reflectors.
c. Package The bikes do not come in packaging; however, they are typically painted with the colors of
advertisers, and then branded in multiple places with the advertiser’s logo and slogans. This low
cost advertisement solution creates a mobile billboard that can be seen by communities in rural
areas where access to TVs, newspapers, and magazines is rare.
- Competitors’ prices Mozambikes has a pricing model that is based on two components: the cost of advertising and
the cost of the bicycle. The cost to advertise on one bike is 2,500 meticais which is equivalent to
$94. The reduced price of the bicycle costs 999 metical which totals to $38. Therefore, the cost
of the bicycle is 3,500 meticais ($132) for customers seeking to purchase the branded bikes. The
price for consumers who wish to buy bicycles directly from the headquarters is also $132.
The advertised bikes are sold at reduced rates, which means that businesses who choose to
advertise with Mozambikes contributes to the changing of rural life for Mozambicans.
- Competitors’ promotion and advertising methods The corporate clients have been initially contacted by the Mozambique sales efforts by reaching
out to businesses throughout the country. Mozambikes participated in awareness campaigns to
promote a cycle-friendly environment since Mozambique faces many challenges of safety on
Maputo roads. Mozambikes also creates campaigns to create brand awareness that encourages
consumer participation. For example, Mozambikes was involved the “Paint for the People”
campaign where Mozambican artists had the opportunity to use their creativity to transform the
bikes into artistic works of art. The bikes were put on display for sale in an auction type of
format where the entire proceeds will be used to provide new bikes for the rural people of
Mozambique.
- Competitors’ distribution channels The assembly facility is located in Maputo, where consumers who seek to purchase individual
Mozambikes-branded bicycles directly from the offices. In addition, the first corporate clients
wanted to purchase the bikes and distribute sell them individually. However, Mozambikes has
secured a recent advertising deal where they will sell the bikes at a reduced rate while partnering
with a distribution network that ensures the bike will be available in retail stores throughout the
country.
C. Market size
- Estimated industry sales for the planning year The most current data found based on the industry in Mozambique was in 2997, where 0 units
were produced in house. Mozambikes is the current market leader since it became available in
- Therefore, the industry sales are not very large since not many businesses are competing in
the bicycle market. However, the market has the potential to be extremely large as 70% of
Mozambique’s population currently resides in rural areas-where commuting to desired locations
proves to be both very difficult and time consuming. With Mozambikes and Eco-Biques
combined the estimated industry sales for the planning year has a potential to reach above the
$500,000 mark- which would ultimately be a massive increase in the industry.
- Estimated sales for your company for the planning year As of 2012, Mozambikes sold 600 bicycles to date since its inception in 2011. At a sale price of
$132, the total sales for both years would total $79, 200. The industry is growing as
Mozambicans are seeing more and more of the value in the product. With that in mind, Eco-
Biques believes it could sell 4000 bikes in its first year of operation while promoting the bicycle
lifestyle and benefits for future years as demand grows. The bikes plan to be sold at an affordable
average price of $120. Therefore, total estimated sales for the planning year are $480,000. That
number seems relatively large since the Mozambique has only sold 600 bikes since its inception;
however, the competition focuses on urban areas, which leaves out a huge chunk of the market.
Eco-Biques plans to capitalize on that opportunity and grow its market from those rural areas.
D. Government participation in the marketplace
- Agencies that can help you USAID- in Africa is focused on ending extreme poverty by moving a number of difficult
obstacles and challenges for women and the youth. The United States Commercial Service
(USCS) has the mission to promote the export of goods and services from the United States,
particularly small and medium-sized businesses to represent U.S business interests
internationally and to help U.S businesses find qualified international partners.
- Regulations you must follow Exporters in Mozambique must be licensed by the Ministry of Commerce. In addition, goods
imported into Mozambique are subject to duties and taxes applied at the border. Under the 2008
VAT regime, bicycles are among the list of commodities that are exempt from the VAT- no
additional payment required.
VI. Sources of information
file:///C:/Users/Kate/Downloads/Rise_of_the_African_consumer-
McKinsey_Africa_Consumer_Insights_Center_report.pdf
http://www.mozambikes.com/en/buy-bikes
http://www.nextbillion.net/blogpost.aspx?blogid=2465
http://blogs.kenan-flagler.unc.edu/impact/2011/12/15/mozambikes-on-the-road-in-mozambique/
http://www.our-africa.org/mozambique/food-daily-life
http://www.usaid.gov/div/portfolio/mozambikes
http://www.infoasaid.org/guide/mozambique/telecommunications-overview
http://www.bizcommunity.com/Article/146/182/114227.html
http://www.ibike.org/library/statistics-data.htm
http://www.ibike.org/pabin/dewaal.PDF
http://www.finmark.org.za/finscope/mozambique/
file:///C:/Users/Kate/Downloads/Rise_of_the_African_consumer-McKinsey_Africa_Consumer_Insights_Center_report.pdf
file:///C:/Users/Kate/Downloads/Rise_of_the_African_consumer-McKinsey_Africa_Consumer_Insights_Center_report.pdf
http://www.wto.org/english/tratop_e/tpr_e/tp154_e.htm
http://www.usaid.gov/div/about
VII. Appendixes
MozamBikes logo/website and product image
Bicycle and other cycle, not motorized production, by Country (latest year available)
Country Year Unit Value Footnotes Algeria 2004 Thousand Units 2.7
Armenia 2008 Thousand Units 0.4
Azerbaijan 2007 Thousand Units 200
Bangladesh 2006 Thousand Units 27.638 1
Belarus 2008 Thousand Units 250.282
Belgium 2003 Thousand Units 173.3 3
Brazil 2008 Thousand Units 2850.427
Bulgaria 2008 Thousand Units 474.453
Cameroon 1995 Thousand Units 0.801
Canada 1997 Thousand Units 912.59
Central African Rep. 1995 Thousand Units 0.65
Chad 1995 Thousand Units 2
Chile 2008 Thousand Units 79.228
China 2008 Thousand Units 63748.7
Colombia 1999 Thousand Units 54.109 4
Croatia 2003 Thousand Units 0
Cuba 2008 Thousand Units 53.3
Czech Republic 2008 Thousand Units 304.634
Denmark 2008 Thousand Units 120.445
Egypt 2000 Thousand Units 3
El Salvador 1997 Thousand Units 2.421
Finland 2008 Thousand Units 23.005
France 2003 Thousand Units 12372
Georgia 1996 Thousand Units 0.951
Germany 2008 Thousand Units 1866
Greece 2004 Thousand Units 159.711 6
Hungary 2008 Thousand Units 356
India 2007 Thousand Units 11397
Indonesia 2002 Thousand Units 2064
Iran(Islamic Rep. of) 2000 Thousand Units 185 7
Iraq 2008 Thousand Units 0.576
Ireland 2004 Thousand Units 0
Italy 2004 Thousand Units 3982.579
Japan 2008 Thousand Units 2200.807
Kazakhstan 2007 Thousand Units 0
Korea, Republic of 2005 Thousand Units 2.249
Kyrgyzstan 2008 Thousand Units 0
Latvia 1999 Thousand Units 2.098
Lithuania 2008 Thousand Units 392.73
Mexico 2008 Thousand Units 1601.6
Mozambique 1997 Thousand Units 0
Myanmar 2007 Thousand Units 53.878
Netherlands 2007 Thousand Units 971 9
Pakistan 2008 Thousand Units 535.519 1
Peru 2005 Thousand Units 23.29
Poland 2008 Thousand Units 1432.4
Portugal 2006 Thousand Units 705
Romania 2007 Thousand Units 277
Russian Federation 2008 Thousand Units 1434
Serbia and Montenegro 2003 Thousand Units 2.544
Slovakia 2008 Thousand Units 56.958
Spain 2001 Thousand Units 491
Sweden 2008 Thousand Units 154.7724
Turkmenistan 1997 Thousand Units 0
Ukraine 2008 Thousand Units 381.292
United Kingdom 2007 Thousand Units 0
Viet Nam 2008 Thousand Units 1689
Footnote
1 Twelve months ending 30 June of year stated.
2 Provisional or estimated figure.
3 Incomplete coverage.
4 Including tricycles.
5 Including delivery tricycles.
6 Excluding Prodcom code 35.42.10.30.
7 Factory employing 10 or more persons.
8 Government production only.
9 Sales.
Source: Industrial Commodity Statistics Database | United Nations Statistics Division
VII. Appendixes
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