Remote car starters

Topics: BusinessMarketing

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Last updated: April 14, 2019

Remote car starters are a new innovation offering safety and convenience. They are currently only available over the internet from U.

S. websites and there is no general awareness among drivers here of their benefits.Figure 1.1: High car ownership offers a huge opportunity for sales in the UKAlmost every aspect of our daily lives from commuting to shopping to leisure activities has become dependant on the car. The average person spends 221 hours in a car and the typical family has one car for each adult member.I intend to test the feasibility of a business that would supply and fit starters as an after market item. The number of private cars has risen to 26 million and this will provide huge market potential for the product.Figure 1.

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2: A Remote Car Starter KitObjectives of this Feasibility StudyPrimary ObjectiveTo establish an operation on a small scale here in the UK that will, under law, sell and install ‘Remote Car Starters’ that will be imported from a Canadian supplier. Aim to break even in the first six months of trading.Secondary Objectives* Analyse local market to establish demand for the product by using both primary and secondary research techniques* Calculate all applicable costs and use these to draft a costing statement* Use three sales forecasting practices to predict sales over the first six months using the data collected from analysing demand in the market* Determine the possibility of seasonal variation in sales and how this will impact on turnover* Conclude findings and analyse whether the launch of remote car starters in the UK would be feasible.Analysing the Local MarketResearch PlanAs the product has not yet been introduced to a UK market it will be necessary to analyse likely demand and the price they are willing to pay. It is also necessary to ascertain whether consumers do not currently own a remote car starter simply because they are not aware of its existence and benefits.In this project both primary and secondary data will be collected to determine whether the launch and sale of remote car starters in the UK would prove feasible. Twenty five questionnaires will be distributed randomly on 14th February 2006 in Fareham town centre.

The choice for this date is because it is in the half term so convenient and also a greater mix of people will be around at lunchtime and to celebrate Valentine’s Day. A further 25 will be asked in Winchester High Street in the week beginning 27th February 2006, thus aiming to boost confidence levels. A questionnaire has been included in the appendix.

This questionnaire has been tested on five volunteers to check it is user friendly and fundamentally, will provide the information required to analyse the market effectively, a practise known as the ‘pilot technique.As the questionnaire is only being asked to 50 volunteers confidence levels will be low in respect of the whole country. This however is not an immediate problem, as trading will be on a small scale and will only expand if the primary objective is met. In addition, secondary research will be carried out, firstly to establish the legality of the product and proposed venture and to see if competition exists currently. If the product is effective and already available over the internet why has no UK firm invested in their promotion?As part of the primary research the Delphi technique will be adopted by interviewing the sales manager at Snows BMW Portsmouth has been arranged. The aim of this interview is both to assist on sales forecasts and car sales patterns in the UK.

In addition to this a visit to Thacham Research Centre has been arranged. Thacham is responsible for approving car related products before they can be released to the UK market.Competitor AnalysisTo analyse potential competition that either exists in the market now or could arise after the launch of remote car starters in the UK. A worldwide trusted business guru, Sir Michael Porter believes to analyse the competition a firm faces they must consider 5 different factors. He developed the ‘Porter’s Five Forces’ model, which is shown below:Figure 4.1: Porter’s Five Forces Model#1 Threat of EntryThere is a high threat of entry in this venture as there is the possibility of making large profits. If this is so then other firms that are likely to enter this new market. They could have better supply chains and capabilities to sell to a wider market, thus presenting strong competition to Start Me Up Before You Go-Go.

#2 Power of BuyersThe initial investment and whole strategy at All Systems Go is based on a hunch. There is no guarantee that it will succeed, as common in business. The idea could both mature rapidly and reach saturation in a matter of months, which would mean big profits and generous returns to stakeholders.

Or the opposite effect could prevail, thus resulting in a loss for stakeholders as the idea flops and they could loose their initial investment.#3 Threat of SubstitutesOut of the five forces the threat of substitutes does not exist at present, the only alternative is not to purchase a remote car starter. This would relate more to the power of the consumer, people are far less likely to purchase something they no nothing about than a familiar item like a loaf of bread.

This is why awareness needs to be raised about remote car starters; the primary research aims to uncover the product’s awareness in the UK.#4 Power of SuppliersThis threat is again low as there is only one supplier who happens to be a family friend. The risk would exist more in the transportation of the remote car starters overseas from Canada to the UK. The transport would be by air and then they would be subject to customs charges when they enter the country, these are all costs that will be accounted for in the costing statement later in the project.#5 Intensity of Competitive MarketAt present the only competitors are sellers on eBay and US retailers.

As stated in the introduction, these individuals offer the product as a unit without installation and no verification of their legality in the UK. This is why a visit to Thatcham Research Centre would be most useful along with emailing the sellers of remote car starters to help with sales forecasting and if they can be installed in the UK. This is known as the Delphi technique. Results of this interview are displayed an a transcript in the appendix.Figure 5.

1: Current CompetitorsAnalysis of Primary and Secondary ResearchPrimary research consisted of twenty-five questionnaires asked to passers by at Fareham Shopping Centre in the afternoon of 14th February 2006 and a further twenty five asked to shoppers on the high street in Winchester in the morning of 28th February 2006. The questionnaires presented to volunteers were the same as the sample in the appendix (reference Figure A.1). Further notes were made on observations of the type of potential consumer, for example white collar workers, children with them etc.

evidence of this can be seen in a specimen questionnaire in the appendix (Figure A.2).The graph below shows the awareness of remote car starters amongst the twenty volunteers questioned.Figure 6.1: Consumer Awareness of Remote Car StartersAs predicted in the introduction, product awareness among potential consumers is relatively low. People do not currently own a remote car starter as they are not aware of their existence, but most of those who had no knowledge of such a product wanted one after just a two minute interview, this is an indicator to take into account when forecasting sales.

This pattern is displayed graphically overleaf.Figure 7.1: Interest in Remote Car StartersOut of the fifty members of the public questioned 62% were interested in purchasing a remote car starter; half of those interested in buying one had no prior knowledge of their existence but in just two minutes were already intrigued. This identifies a factor that a successful launch of remote car starters to a UK market depends heavily on effective marketing. To create a need for the product and meet that need with product that delights and is not priced too high. The pricing strategy to be adopted by All Systems Go will be based on these findings and stated in the sales forecast.The two graphs overleaf give an early indication of the target market.

It covers both gender and age group of the potential consumer.Figure 8.1: Gender of Potential ConsumersFigure 8.2: Consumer Age GroupsGenerally, the target market appears to be males aged between 36-45 years. They tend to own more than one car and have a family. This assumption was made both from their answers to the questionnaire and who they were with.

Key Conclusions on Market AnalysisAfter conducting extensive market analysis four key points can be drawn both about the potential consumer and the market:1. There is low competition currently in the UK, its only existence being in US websites and eBay2. The target market has been identified as males between the ages of 36-45 years3. There is relatively low awareness in the market of this innovative product4. It was mentioned in the interview that remote car starters have been available in Canada for about 12 years and are considered old technology among North Americans. They are a product that continues to be developed for new car models though, and that has kept demand constant over their life cycle5.

Thatcham have not yet approved the use of remote car starters in the UK so at present they are not a legal accessory to install to your car. They did however give consent to Vodafone for the use of this technology in mobile telephones where a user can start their car from outside using their Vodafone handset. This was later quashed by the Police force though, who did not like the idea of keyless entry to an automobile using a mobile phone, they claim that mobile phone theft is so high it could then have a direct impact on automotive crime.

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