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Mlp Marketing Plan

Essay by   •  March 1, 2011  •  Business Plan  •  3,083 Words (13 Pages)  •  1,452 Views

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Marketing Plan

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Marketing Strategy presented in Question and Answer Format

How can MLP be sure the CSOs will want the SRC ?

How can MLP make money with a SRC design ?

Why would an auto maker want to take a risk on producing the SRC ?

How can MLP demonstrate that a market exists ?

How big must the random sample of end users be ?

Where will the SRC be test marketed ?

What is a sufficient volume of SRC production to justify the cost of an auto plant?

If the SRC is feasible, why haven't the auto companies done it already ?

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How can MLP be sure the CSOs will want the SRC ?

Mobility For A Living Planet (MLP) will study the operating conditions and business practice of European CSOs. Top of the list is the parking situation. For example : what percentage of shared cars are parked curb side, open lot and parking garage ? If 90% are parked in groups of only 2 at curbside then perhaps the SRC needs to have a different body design. What is the typical width of a curbside space ? Could a short enough vehicle park perpendicular to the curb ? How expensive would it be to install a curbside electrical charging station ? If a large fraction park in parking garages then what is the ceiling height limitation ?

Other questions to consider are seating capacity, cargo capacity, and trip length. What is the distribution of trip lengths over a week ? If most days are spent making many short trips totalling only 30 miles, then a plugin hybrid with conventional batteries would be able to operate for most of the time in all electric mode. Although the average miles per day is 50 for some CSOs, the median day in a week might only be 30. It only takes one day of long trips, say 170 miles, to drive the weekly average up to 50.

MLP will seek to obtain information on all costs of operation for European CSOs. Then a cost model based on the SRC will be shown to be lower in cost than leased conventional cars.

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How can MLP make money with a SRC design ?

MLP will persuade an auto maker to mass produce the SRC and pay royalties. By 2013 I expect some auto maker to be making 70,000 SRC a year and paying MLP $35 million in royalties. In 2020, auto makers will make 1.8 million cars and pay $ 542 million in royalties. Royalties per year are forecast in the section Royalty Revenue Forecast. The numbers of potential users, upon which the royalty revenue forecast is based is estimated in Projected Car Share Users.

The initial patent will expire in 2013. Follow on patents filed between 2005 and 2008 will not expire till 2025-2028. The car company will have a protected market for about 20 years. The car company could have a healthy profit per car because no other maker would be licensed to use the design and hence there would be no competition and no cut throat pricing.

When recruiting a car company, MLP will approach the majors, but also look at the smaller firms that can turn a profit on only 10 thousand cars per year. Given that there is no demonstrated, pre-existing market that absorbs 60,000 SRCs per year, it might be better to start with a small plant that makes only 10,000 per year. This small maker would have an exclusive license to make and sell in geographic area of 20 million or less. If they sell well, then it will be easier to convince a major, like Honda, to start making 60,000 a year.

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Why would an auto maker want to take a risk on producing the SRC ?

There is no large existing market. Is the SRC just a niche market item ?

MLP will prove SRC demand exists with test marketing to end users and CSOs. By the end of the test market phase there will be hundreds of end-users, dozens of CSOs and dozens of parking providers that will attest to the SRC's market potential.

Any mass produced car is a risk. Especially when competing with many other car makers for a slice of a market flooded with different models. Think of all the companies that make sedans, pickup trucks, economy cars, and SUVs.

But the SRC will be protected by patents and so a car company that makes the SRC will have protection from the 37 other car companies making generic economy cars.

While it is true there is no large existing market it is also true that the market potential is huge. About 245 million people around the world are potential car share users. The development of this market has been hindered by the lack of a car like the SRC. Conventional cars are not designed to take the abuse of rental operations while surviving for 10 years. The cost of providing shared cars is higher than it could be. The SRC will bring costs down and tap this huge market.

Remember, at one time there was no existing market for overnight package delivery or for personal computers. The market potential was there. The fundamentals were right. But until an economy of scale is achieved, it is difficult to prove, to all doubters, that a market exists. MLP will demonstrate that the market exists with market studies, focus groups and random sampling.

Several car companies that have already noticed the market potential of Car Sharing are listed in a later section.

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How can MLP demonstrate that a market exists?

MLP will convince several parties of the SRC's market potential :

End users will be convinced that the combination

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