The following report is about the company ‘Auto Spa’, the first mobile car detailing service in Pakistan. The following report contains the introduction and background of the company, marketing environmental analysis. This includes the macro and the micro environment of the business. The micro environment contains the marketing mix and the product life cycle. The report then goes on to explain the SWOT analysis with a conclusion. It looks into the future growth opportunities of Auto spa, 3 to 5 years after the business comes into existence. It looks at the marketing objectives in coherence with the growth opportunities along with the market segmentation and marketing mix accordingly.
Introduction and background
Auto Spa brings to you the first ever mobile, car detailing service providers in Pakistan. We aim to make life much easier, simpler and uncomplicated for our consumers by providing door to door car detailing service facilities
Auto Spa offers its customers the opportunity of having their cars spick and span without going through the hassle of waiting in long queue’s or worrying about mishandling of the car at the hands of the care taker of the car, we give customers the advantage of having their cars serviced right in front of them with the best quality products. . Auto spa provides all sorts of services to your car under your OWN roof. Our unique selling point is that we come to you and offer services at competitive prices.
The spa for your car is just a call away. Auto spa is a dynamic start-up company business located in Lahore providing all kinds of car services at customer’s doorstep. Our services will include all luxurious spa treatments that your car will love to get done.
Auto spa not only cares about its customers. We, as an organisation, are socially responsible. Our aim is not only to provide quality services to our customers but to be environmentally friendly.
Our water reclamation system will provide an environmentally safe means for our customers to clean their automobiles. This differs from residential car washing, where untreated wash water fills storm drains and ultimately empties into our waterways. Also we will be using a new technology that will use steam to clean cars helping us save on water
Water Flow rate in general is 2.6 minutes wash and rinse at 3 gallons per minute; 5.3 minutes pre-soak foaming brush and tire & engine cleaning at 0.6 gallons per minute. Thus the average water used for wash and rinse is 7.9 gallons and the average water used for pre-soak foaming brush and tire & engine cleaning is 3.2 gallons.
The water from your carwash contains pollutants ranging from oil, grease, and suspended solids to detergents. Detergents such as the carwash or liquid soap can seriously affect the water quality of local waterways. If you wash your own car in your driveway and use your garden hose with a flow rate of 8 gallons per minute and you fill up a 5 gallon bucket with soap and then wash your car. We will be very efficient on saving water.
We are going to introduce the use of inflatable mats in the process of car washing. The car is parked on the mat; the mat contains all the water used, without dirtying the car park area.. We make sure that the service provided is convenient for the customers and do not cause them any trouble at the hands of the employees or the management or in terms of the service being provided. We value our customers above everything else.
We will be operating through one main head office in Gulberg and then smaller branches in Defence, Cantt and Model town.
We will provide exceptional car care services to the customers, Quality services that will exceed expectations and will establish auto spa as the premiere car detailing service providers in the area. It will provide the following main spa treatments to your car:
1. High pressure cleaning.
2. Shampoo wash.
3. Liquid wax spray.
4.Wheel brush washes.
5. Rinsing and drying
Auto spa along with those core services will provide supplementary services to its customers in the form of after sale services.
Market situational analysis
There are originally only 3 P’s for marketing services; People; physical evidence and processes. However there are other factors that are of importance and have to be taken into account for marketing any services. These are price and promotions; a part of the marketing mix for products. These tools are equally applicable to any service.
At an initial stage our prime objective will be to cover variable costs and some of our fixed costs in order to stay in the business. But this is just our short-run objective but in the long-run, we would want to add value and extinction. Value innovation focuses on making the competition irrelevant by creating a leap of value for buyers and for the company, thereby opening up new and uncontested market space. Because value to buyers comes from the offering’s utility minus its price, and because value to the company is generated from the offering’s price minus its cost, value innovation is achieved only when the whole system of utility, price and cost is aligned.
For auto spa, we aim to be the product-quality leader in the market. We strive to offer competitive prices for services characterized by high levels of perceived quality, taste and status. We aim to be the business leaders in quality, with premium pricing and a very loyal customer base.
Price Elasticity of Demand:
We need to know how responsive or elastic the demand would be to a change in price. The higher the elasticity, the greater the volume growth, resulting in reduction of price. According to our research, inflation led to substantially higher price elasticities, especially in the short-run. The expansion of the business will be with respect of our revenues earned.
A combination of pull and push strategies will be applied to reach our milestone.
Pull strategy will include:
Personal communication (selling, customer service, training, telemarketing and word of mouth)
Advertising ( broadcast podcasts, print, internet, outdoor, direct mail)
Sales promotions ( sampling, coupons, gifts and prize promotions)
Publicity and public relations (trade shows, media Initiated coverage)
Instructions manual ( websites, manuals, brochures, interactive software and voice mail)
Corporate design ( signage, interior décor, vehicles, equipment, stationary and uniforms)
Push strategy includes memberships to our prospects and special discounts on annual and semi-annual memberships. Special packages will be offered throughout the week, like squeaky Saturday deal.
‘ People’ in any organisation consists of front line and bottom line employees. Front line employees consists of the workforce that are in constant touch with the customers. These would be the customer representatives and the workforce personnel who would be in high contact with the customers.
‘Bottom line employees’ is the term used for the part of the workforce that will be in low contact with the customers. This includes the management and people behind the scenes in providing a service.
In a service, there is an absence of tangible elements unlike products. However, physical evidences do exist still. The physical evidence in a service comes from the things that compliment the service process. For auto spa, the tangible elements or the physical evidence will come from the assets; including the equipment used for the procedure and the vehicles. Most of the things making up the corporate design of a company gives the physical evidence of a service. These would be the stationary, the uniforms of the employees, the vehicles and the interior decor of the office.
The process of the car wash and detailing service starts off by placing a call at our UAN number (111-auto-spa) and getting in touch with our customer representative and seeking information. There are Different packages (Appendix1) offering different services according to customer car specifications. Customers also have an option of adding items to those packages. After the call has been taken and the order received from the respective customer, the services providing personnel would be sent to the respective address from the nearest centre located to the particular area.
The personnel, upon arrival, will confirm the package and will brief the customer on the procedure of the detailing service. Auto spa will keep a track of the personnel while the procedure takes place to ensure quality service to its customers.
Apart from the core service, auto spa believes in providing customers supplementary services to ensure customer satisfaction. After the service is done, customer would receive a call from the centre for quality assurance. Getting customer feedback and working upon it is very important to our organization.
The operations of our car wash and detailing services are described in the service production processes diagram (SPPD) shown below.
Changes in the wider macro-environment may not be as close to the marketing firm’s day-to-day operations, but they are just as important. The main factors making up these wider macro-environmental forces fall into four groups.
Social and cultural factors
The political and economic environment
Domestic political considerations are of prime concerns when launching up a new business . Political instability and economic conditions go hand in hand. The economy fluctuates, if the political situation is instable and therefore has a great impact in the business world. The current economy has remained difficult over the past few years. However, Car Wash businesses typically operate with a strong state of economic stability as these businesses provide a broad level of car cleaning services with a relatively low pricing point. As such, the Car Wash will be able to remain profitable and cash flow positive at all times despite the current state of the economy. Many of the legal, economic and social developments, in our own society and in others, are the direct result of political decisions put into practice, for example the privatization of state industries or the control of inflation In summary, whatever industry the marketing firm is involved in, changes in the political and legal environments at both the domestic and international levels can affect the company and therefore needs to be fully understood.
As can be seen, changes in world economic forces are potentially highly significant to marketing firms, particularly those engaged in international marketing. However, an understanding of economic changes and forces in the domestic economy is also of vital importance as such forces have the most immediate impact.One such factor is a high level of unemployment, which decreases the effective demand for many luxury consumer goods, adversely affecting the demand for the industrial machinery required to produce such goods. Other domestic economic variables are the rate of inflation and the level of domestic interest rates, which affect the potential return from new investments and can inhibit the adoption and diffusion of new technologies. In addition to these more indirect factors, competitive firms can also pose a threat to the marketing company so their activities should be closely monitored.
It is therefore vital that we continually monitor the economic environment at both domestic and world levels. Economic changes pose a set of opportunities and threats, and by understanding and carefully monitoring the economic environment, firms should be in a position to guard against potential threats and to capitalize on opportunities.
The socio-cultural environment
This is perhaps the most difficult element of the macro-environment to evaluate, manifesting itself in changing tastes, purchasing behaviour and changing priorities. The type of goods and services demanded by consumers is a function of their social conditioning and their consequent attitudes and beliefs.
Generally, social change is preceded by changes over time in a society’s secondary cultural values. In Pakistan, there is a huge demand for luxury product and door-to-door services as convenience being one of the important factor. So, according to our survey, we have seen a great demand of a service like mobile car wash. More so, the people are willing to pay even more than what they have otherwise. since people do not have enough time to especially go for the detailing. And hence, the vehicle is ignored. Had it been a decade ago, people would still prefer visiting to the auto detailers rather than getting it done on their door steps. .
The technological environment
Technology is a major macro-environmental variable which has influenced the development of many of the products. Auto Spa would also be making use of the highly sophisticated machinery available so that the consumers can get the best results. Manufacturers of fast-moving consumer goods have been forced to respond to these technological innovations.. In this way, a change in the technological environment will affect the services that firms produce and the way in which firms carry out their business operations.
Product life cycle
Product life cycle management is the succession of strategies used by business management as a product goes through its life cycle. The condition in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures. Auto Spa is in its introduction stage where our major motive is to penetrate and market our auto detailing services. In this stage, costs are usually high as a lot ov heavy investment is being done. The sales are comparatively slow. Since it’s a launch of a service which has never been introduced before so we will not have any threats from the competitors. Usually in this stage, it is impossible to start recovering the costs, therefore we will not be expecting to make money at this stage. However, we do intend to make profits in later stages.
We believe that the marketing strategies adopted thorough the marketing mix by our service providing company will prove to be effective. The promotional strategies that we are adopting are aggressive and detailed. We are making use of various platforms to market our service and we want to penetrate our target market segment. We aim to be the market leaders with pioneering in mobile car service detailing.
The prices that we are going to use initially are going to be comparatively competitive, since we don’t want to compromise on service quality. The prices, however, are set keeping in mind the economic and financial situation of the country and keeping the inflation in mind. The price of the service will not be anything that the target consumer will not be able to pay or would not want to spend on such a nature of services.
People in any business are very important. May the business be offering a product or a service. in services however, the front line employees have a more important role to play. We train our front line employees so that the quality of service is not compromised at the hands of the personnel and that our sales representatives are polite to the employees and have the right information and guidance according to customer car specifications. we understand the importance of the role the front line managers have to be play when providing a service and a lot of training and importance will be given to this aspect of the business.
The physical evidence in a service may not be as important as a product for an organisation, but the physical evidence tells a lot about an organisation. The corporate design, which includes most of the elements that make up physical evidence is very important to any organisation. May it be providing products or services. The corporate design of a firm speaks for the credibility and goodwill of a company. Hence, keeping all these things in mind, we will ensure that the physical evidence is given the due importance and gives out the desired message to the target market and general public about the product. we aim to tell the consumers that we provide the best quality of services in town and we will make sure that our physical evidence gives out the required vibes.
In the product life cycle, our service is at the introductory stage. We seek to pass the introductory stage smoothly and peacefully and as per planned. The marketing mix is designed in such a way to ensure the smooth sailing of the service from the introductory stage to the growth stage.
Auto spa aims to stay in the growth stage for the longest time. This will be done through various simple strategies. One, we will not compromise on the quality of the services at any point in time. We aim to be constant and consistent with the quality of services offered to respected customers. We will penetrate the market once we are over the introductory stage, the quality again will not be compromised for the lower income level. The services offered will be limited, fitting into their respective pay scales.
Future growth opportunities
These are the growth opportunities that we aim to explore in the coming 3-5 years.Auto spa will continue to expand through organic means including increasing the Company’s advertising budget via the reinvestment into the after tax cash flows of the business. Additionally, if the business is highly successful then the Company may seek to establish additional service centers after the third year of operations
The car detailing and service market has seen steady, 4% growth for the last six years.
We aim to gain and then most importantly retain existing customers through goodwill and customer loyality. Auto spa wants to create its brand image and awareness amongst all market segments.As mentioned above, we aim to do this by penetrating in the market and stay in the growth stage for the longest time period possible. Once we reach the maturity, we plan on to revive the marketing and business plan to start the growth again.
We will keep on adding value to the services offered through constant training of the employees and improving the quality of the services provided
Growth is forecasted at 4% for the next four years.
â€¢ Increase repeat customers by 4% a quarter.
â€¢ Steadily increase market share every quarter.
â€¢ Develop brand awareness and acceptance, quantified by a decrease in customer
Increase the profit margin by 5% a quarter.
â€¢ Achieve a double-digit growth rate each year for at least the first three years.
â€¢ Develop efficiencies in the delivery of the service through advanced training and work-flow
The bigger chunk of market is segmented by people owning a car first of all. These people will be belonging to the socio economic class A and B. within this bigger market segment, smaller segments will be created according to the type of car ownership
1. Owners of newer cars: Owners of newer cars are most likely to use a higher quality washing service with the products specific to their car. These owners take great pride in their cars and are more likely to call us often for car wash and detail services.
The goal with these customers is to promote regular use of the wash and detail service. We aim to inform this particular sect of customers that mobile car wash will keep their car looking as good as it did the day they drove it off the lot.
2. Older luxury car owners: These people have either owned their high-end luxury cars for
several years or are unable to afford the expense of a new luxury car but want the feel of
relaxed driving. Both of these groups want to keep their cars in the best shape possible.
Those who have bought second-hand cars will often spend many hours in their cars and
will place high importance on keeping their cars looking good. These owners will call us in
for regular washes and occasional details.
3. Sports car owners: These people are often younger or middle-aged men and will regard
the look of their car as important. They will also pride themselves on the look of their car
and will have their car hand washed (at least) weekly. These drivers will have an
Occasional detail servicing, but will keep their cars so clean the detail will not be necessary very
4. Lifetime owners: Many of these people have owned their cars for more than five or six
years, and are more likely to be women. They are attached to their cars as friends and
though it may be more sensible for them to purchase a new car, they will call us for a wash occasionally, just when the car is dirty. They like their cars to look presentable,
and want to keep it in good shape but are not tied up in the look of their car. For this
reason, they will not have a detail carried out on their car unless they are selling it.
5. Dealerships: There are a few new and used car dealerships within the proposed location of mobile car wash. These dealerships often use outside car wash services
to detail their vehicles before they are put up for sale.
6. Local businesses: Some local businesses have fleets of cars and small vans that must be
kept clean to maintain their company image. These businesses will be looking for a cost
effective, efficient car washing service to perform this service, and will prefer to use a car
wash service during the week rather than during weekends, like the general public.
Please note for analysis purposes in regards to the charts and graphs, the different segments will be grouped into individuals and businesses. This will be done to allow the charts and graphs to have a clean look that will aid in the ability to quickly discern information from them.
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