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Essay Subject: Examines national & global marketing, focusing on mountain (all-terrain) bikes. Market size, major firms, distribution, consumer traits, environmental issues, technology, future.... More...

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Paper Abstract: Examines national & global marketing, focusing on mountain (all-terrain) bikes. Market size, major firms, distribution, consumer traits, environmental issues, technology, future. Paper Introduction: Introduction The bicycle is one of the most universal modes of transportation in the world today. Other than the initial purchase, there are few operating costs associated with it, so it is popular among individuals who need basic transportation but who may lack the requisite finances for an automobile and its upkeep. Unlike public transportation, owners of bicycles do not depend on a pre-set schedule, and they have the freedom to go where they need rather than traveling along a predefined route. But bicycles are also used by many individuals as a form of exercise, as a way of touring, and by children as their only means of transportation. The bicycling industry is a multibillion dollar industry with global participants and global markets. Companies in various countries can be affected not only by demand in other nations Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. NewYork: Everen Securities, Inc. Increased health and exercise awareness is also likely to work to keepdemand for recreational bicycles steady as Americans and others usebicycles to improve or maintain their fitness levels. Mosthigh quality bicycles are sold by specialty bicycle dealers (there weremore than 66 in the country in 1996) while discount stores and massretailers sell many more units at lower prices. (1996, June 4). 6 4 57). AmericanDemographics, pp. (1996, May 8). 3 ). Recreational bicycle riders are a much larger group than theircommuter counterparts: nearly 33 million Americans consider themselvesrecreational riders according to a recent survey. (1996, June 24). (1996, November 4). In recentyears, the mountain bicycle has become the American bicycle of choicebecause of the comfort of its ride and its ease of handling; children'sbicycles often center around the BMX race bike, which can be used outsideof competition, as well. The market is international, with thelargest bicycle markets based in the United States and Asia. (1997, June 16). The aging of the baby boomers results in Generation X coming of age.This younger group of consumers generally lack the affluence of theirparents, but has also demonstrated a strong level of demand for luxuryitems, including single malt scotch and premier cigars. 34. (1996, February 5). Older bicycle commuters (thosebetween 45 and 54) have average household incomes of approximately $36, compared to an average household income of $35, for all commuters inthat age group. The industry has seen significant growthduring the 198 s and early 199 s, in part due to the introduction of theall-terrain bicycle, and the increased call for decreased congestion andpollution throughout the world may give additional life to this mode oftransport which is well over 1 years old. 28-32. 3-4. Instead, these consumers are interested in high-technology productsand luxury versions of items that were once commonplace (including, besidesbicycles, writing instruments and watches). 7 9DCW 7). The plant is setto produce more than three million bicycles per year and will employ morethan 15 workers. The international bicycle market is concentrated in the United States,Asia and Europe, with the United States enjoying the dominant market sharein terms of manufacturing. Because of these factors, there is an increasedcall for the integration of bicycle routes and bicycle education in orderto boost the use of bicycles in key European cities (Knott, 1996, p. Today, the city is designed forbicycles with more than 3 miles of street bike lanes and approximatelyseven miles of off-road bicycle paths within its 24 square miles. By undertaking intensive internalrestructuring and reengineering, the company has now successfully emergedas a robust international competitor in several market segments with totalsales of 64 , units in 1995 (Jesitus, 1996, p. Electric bike makes for air-friendlytrips. L. Palo Alto, a city of 56, in Northern California, offers a goodexample of how some American communities are working to foster bicycle-friendly environments. This problem is particularly troublesomein the area of computer software, but also exists in other product lines.The tariffs which have been proposed do not always correspond to theproducts which are pirated, but can be imposed at as high rate as 1 percent (Emert, 1995, p. However, increasedcomplaints from American manufacturers that the Chinese were "dumping"products led to a tariff of 62 percent being imposed on bicycles importedfrom China ("Reinventing," 1995, p. This bike is 18 percentthan traditional bicycles, and can be produced for less than $5 ("WorldBikes," 1996, p. Recently, an engineer for DuPont created the three-spoked wheel, whichcombines principles from both the solid disk wheel and the traditionalspoked wheel. Outta site. As the Web continues to grow andreach more consumers around the world, it is likely that othermanufacturers will also take full advantage of the opportunity to displayproduct information, learn more about their consumers and sell directlythrough this distribution channel in addition to traditional channels(Schafer, 1996, p. With a top speed of just under 2 miles per hour,these bicycles can be ridden in many states without a license. Corporate arrogance is blamed for the loss of market share thatSchwinn suffered during the 198 s and early 199 s. The result can be an increase of as much as one mile perhour, which is a critical success factor in long tours (such as the Tour deFrance). Recent Cultural Issues Approximately 9 million American adults ride a bicycle at least onceper year; that number is expected to increase as the 199 Clean Air Act andthe 1991 Intermodal Surface Transportation Efficiency Act (ISTEA) givelocal communities incentives to build bicycling into their transportationplans. (1996, February). Recent Market Participants In the United States, Trek Bicycle Corporation is the market leaderfor all-terrain bicycles with an estimated 5 percent market share in 1995;Cannondale Corporation is the nation's second largest all-terrain bikemanufacturer, and supplied a specially designed lightweight aluminumbicycle to the Olympics. High-end automakers peddle car-brandedmountain bikes. Retailers can now place orders for products directly from theWeb site, eliminating the need for distributors and resulting in lowercosts for both Ritchey and the retailer. In addition, local zoningordinances require on-site bike parking for commercial developments andsome employers are required to build showers for their employees (Larson,1995, p. This involves so-calledluxury brands being affixed to bicycles and then being sold throughnontraditional bicycle channels. Shimano received more than 6 complaints of cranks breaking inNorth America resulting in 22 injuries, and the recall was issued incooperation with the Consumer Product Safety Commission. Disk wheels have been used by racers for years; these wheels are asolid disk of composite material supporting the rim on which the tire ismounted. From the 195 s through the early 197 s, Schwinn dominated theAmerican bicycle market and exported its goods, as well. There are also cultural issues affecting Asian consumers, includingthe desire to have higher quality bicycles. 4). 24). On the road again. Montaguealso participated in the 1996 Atlanta Olympics by supplying more than 1, of its folding bikes to journalists, committee members and others tofacilitate transportation in and around the various venues. Vietnam's bicycle industry isowned by the state, but suffered strong competition from the Chineseindustry during the early 199 s. 45. Environmental awareness and heightened awareness ofthe importance of physical activity should help maintain a steady demandfor bicycles throughout the world, although the strong demand whichcharacterized the industry during the 198 s and early 199 s is not likelyto be repeated. In the international market, Dunhill Beersheba, based in Israel, hastaken an international approach to its marketing strategy that focuses onEurope and China. S. Specialized Bicycle performed well in the earlyyears and had little competition. 74. Another trend which should help boost sales at the higher end of theindustry is the "luxury" branding of bicycles. (1996, July 1). Recent Market Size Mountain biking made its Olympic debut in the 1996 Atlanta games, amove which is expected to increase long-term demand for all-terrainbicycles. 76). Shortly after adopting this largely public relations strategyfor its Web site, the company decided to entirely redesign its site to makeit a more integral part of the company's long-term marketing strategy. McCabe, K. Reinventing the bicycle. 36. Traditional toe clips are designed so thatthe rider has leverage on the upstroke as well as the downstroke whenpedaling; this improves overall pedaling efficiency. 53-54. Recreational riders are more likely tobe married than their nonbicycling counterparts (64 percent of recreationalriders versus 56 percent of Americans as a group), and are more likely tohave professional or managerial jobs (39 percent versus 26 percent). The winner of the competitionwas a Brazilian entry which features adjustable ergonomics for varyinghandling characteristics, while one of the runners-up used glass-fibermaterials in more than 8 percent of the frame. Three-spoked wheel is the latest inventionin the bicycle world. 34). Jesitus, J. Cannondale, GT, Mongoose, Roadmaster,Specialized, Schwinn and Trek are among the market leaders affected by therecall, and, although no lawsuits have been filed against Shimano, the highreliance of companies on a single supplier illustrates some legal riskshould litigation arise ("CPSC," 1997, p. There has also beenan increase in the number of packaged vacations which include bicycles aseither the main mode of transportation or as a feature at the destination;this should heighten the awareness and popularity of bicycling throughoutthe nation. The Financial Times, p. Futuretechnological innovations are likely to continue to develop along theselines as manufacturers and third parties seek to improve all of thecomponents of bicycles in order to improve the overall performance of bothbike and rider (Eckert, 1997, p. (1994, April 18). One of America's most successful bicycle manufacturers, Schwinn,entered bankruptcy in the early 199 s and has been struggling to recoversince. This increase is due to a general lagging of the overseas marketto the American market and to the popularity of American products in somemarkets, particularly Japan. Under Long's direction, GT successfully took onmountain bike leader Cannondale and offered formidable competition. 45). The paper notes that flexibility and independence of movementare critical success factors to this effort, but also notes that somestudies indicate that the average traffic speed in some European citiesduring peak periods are lower than when the horsedrawn carriage was theregular mode of transport. Low-key luxury. This suggests that bicyclists at this stage of their liveshave reasons other than cost for choosing to use the bicycle as theirprimary means of commuting. 6 4 57). 7 3 111). At the same time, Vietnamese consumerswho were able to preferred the higher quality Chinese-built bicycles, whichoften sold for little more than the Vietnamese bicycles. 36). GT Bicycles is larger than Cannondale, but must engage in strongmarketing and research and development efforts if it is going to besuccessful at improving its image to the point that it can outsell its mainrival. Initially marketed in early 1997,this innovation competes not only with traditional toe clips, but also withspecially designed "cleated" shoes that fit into bike pedals. These manufacturers attempt to establish astrong brand image with riders that can be retained as riders mature tomountain and road bicycles. Children also make up a large contingent of bicycle riders in theUnited States as bicycle often provide the only independent means oftransportation for those under 18 years of age. Nation's Business, pp. The Trek Y bicycle, which hasa particular appeal to this age group (those born between 1964 and 1979),is designed for intense off-road use with rapid-adjustable damping (RAD),but its bright yellow frames and high technology has a strong appeal to theyounger consumers and has contributed significantly to Trek's performancein the mountain bike area. Oklahoma-based outdoor recreation firmbuys Mongoose bicycles. Motocross bicycles (BMX bikes) target the under-18 riderand are designed for competition in off-road races, although many of thesebicycles are also ridden as transportation by those not yet old enough todrive cars. Knott, D. Underwood, E. 4 ). Most major manufacturers supporttheir products with national advertising, including television and printads, and some work with their larger retailers in co-operative advertisingefforts (Barrier, 1996, p. Such a strategy enables the name brandowner to receive the licensing revenue while the bicycle manufacturers gainaccess to additional distribution channels thus increasing their marketpresence and ideally their market share, as well (Halliday, 1996, p. Recent Distribution Strategy In the United States, small retailers account for more than half ofthe nation's annual bicycle sales, but competition from discount stores andmass retailers is bringing changes to this distribution strategy. 41). A replica of the Olympic bicycle was later madeavailable to consumers for $849. (1995, February 6). Road bicycles are typically racing bikes thathave narrower tires with curved handlebars. Specialty bicycles can be built for racing, but are increasinglytaking advantage of "branding" to differentiate themselves from other typesof bicycles. The world bikes of tomorrow. GT Bicycles,which is one of the nation's most successful manufacturers, must nowcompete without its co-founder Richard Long, who was killed in a motorcycleaccident in July 1996. 122 B1 7. The United States continues tooffer one of the most lucrative markets for bicycles, but China and Europeare also attractive markets. In aposition paper published in early 1996, the EC called for an interlinkedtransportation system which makes it easier for commuters and others to usemultiple forms of public transportation in combination with automobiles andbicycles. Many of these bicycles will be targeted at the largeChinese market, but additional units will be shipped to Europe ("Bikes toPrague," 1995, p. Bicycle commuters are concentrated in Pacificstates where the concentration can be as high as 5 bicycle commuters per1, commuters. (1995, November 18). The company is set to build a manufacturing plant inCanton with a total investment of more than $1 million. Bicycle enthusiasts andmoving ups comprise ten percent of all recreational riders, but areresponsible for 3 percent of bicycling industry revenue in the UnitedStates. The contest itself was international inscope, a reflection of the industry's international presence, and thedesigns which emerged as a result of the competition may well indicate thedirection in which the industry is moving. Boroughs, D. 44). In Germany, which is Europe's largest bicyclemarket, demand fell by ten percent from 1993 to 1994, and British saleswere also stagnant during the same period, as were European sales as awhole during that same period ("Reinventing," 1995, p. (1995, March). 5 8 7 . (1995, January). BMW and Harley-Davidson are two of the companies which marketspecialty branded bicycles (neither manufacturer builds their bicycles),and some companies are seeking to exploit the "retro" trend in marketing bymanufacturing bicycles which recall previous historical eras, such as thebeach cruiser popular during the 195 s and 196 s in the United States(Bernard, 1997, p. Montague Corporation is a smaller participant in the all-terrainbicycle market with sales of between $1 million and $15 million in 1995.A privately held company, Montague supplies mountain bicycles to BMW, whichmarkets folding mountain bikes at its automotive dealerships. GT Bicycles Company Report. The mountain bike industry began when Specialized Bicycle Componentsof Morgan Hill, California, introduced the Stumpjumper in 198 for $75 ; itwas the nation's first mass produced all-terrain bicycle and has beenplaced in the Smithsonian Institution as testament to the role it played inmodern American life. In the television and print adspromoting the pairing, the Jetta is shown with the Trek on a carrier on topof the car and a tag line indicating that the Volkswagen with the Trekbicycle is a "fun" combination. 35). Conclusion The bicycle industry is indeed an international industry with bicyclesmanufactured and sold throughout the world. U.S. Some communities in the United States, such asPalo Alto, have become "bicycle friendly" in an effort to reduce congestionand air pollution, and the EC has recently taken steps to increase the useof bicycles in Europe as a way of accomplishing the same goals. 3). Tiernan, B. Other than the initial purchase, there are few operatingcosts associated with it, so it is popular among individuals who need basictransportation but who may lack the requisite finances for an automobileand its upkeep. Journal of Commerceand Commercial, p. 28). All-terrain bicycles accounted for more than 65 percent of allbicycles sold through dealers and specialty retailers during 1995, withsimilar figures posted in discount and mass merchandising stores. 9A). Specialized spends aconsiderable amount on research and development, a strategy which hasenabled it to introduce technology on bikes selling for under $6 that wasformerly only found on bikes costing $12 and more (Kaufman, 1996, p.122 B1 7). Inventor claws into biking with a newtake on toe clips. Bernard, S. 35. This shift in cultural influences is likelyto have a long-term effect on demand for bicycles in Vietnam, which islikely to shift from Chines bicycles to motorcycles as younger consumers(who now comprise the majority of the Vietnamese population) move out ofthe bicycle market altogether (Whitesides, 1994, p. The earlymodels have a range of just 15 miles on two small batteries, but rechargingtakes only two hours on house current and costs approximately five cents.The result is an alternative for short commutes which is finding anattractive market in urban areas with traffic and pollution problems, suchas Phoenix and Los Angeles (Golfen, 1996, p. The additional classification of recreational riders is based on thenumber of times they ride during nonwinter months, the number of times theyvisited an independent bicycle retailer in the past year, and the amountthey paid for their most recent bicycle purchase. Thismarket segment has enjoyed the largest amount of growth over the past tenyears and now accounts for more than 6 percent of all sales at independentbicycle dealers. Motorcycles. Recent Legal Environment In a move which surprised many in the bicycle industry, ShimanoAmerican Corporation announced in mid-1997 that it was recalling more thanone million pedal cranks installed in North American bicycles. Halliday, J. But bicycles are alsoused by many individuals as a form of exercise, as a way of touring, and bychildren as their only means of transportation. This group ofconsumers is interested in conspicuous consumption of luxury goods, but notthe same type nor brands of goods that appealed to consumers during the198 s. the city adopted a bikeway master plan and builtbike routes and lanes at that time. Future Consumer Characteristics It is expected that consumers for bicycles will likely remain dividedinto the categories that exist now with more people attracted to bicyclingas a leisure activity. Future Market Participants The 199 s have seen a consolidation in the bicycle industry which islikely to continue into the next century. The companyposted 1995 sales of more than $2 million with sales in the United Statesas well as in fast-growing markets such as Germany, Japan and Europe(McCabe, 1996, p. Bicycles are likely to continue to be popular throughout the world andmay even increase in popularity in part because of pollution and congestionpressures in urban areas. In addition, parents are likely to continue to purchasebicycles for their children, keeping that market segment strong. Knight-Ridder/ Tribune Business News,p. In the three-spoked wheel, a rigid skin of compositematerial made of woven carbon fiber encases a foam core. 45). (1996, December 2 ). Thecompany also faced takeover bids in the early 199 s which detracted fromits marketing and financial performance. WWD, pp. Tariffs are also usedto put pressure on the Chinese government to reduce the manufacture ofpirated American goods in China. Long-term, the future of bicycling is likely to see an increase in thenumber of electric bicycles in the United States. Disk wheels provide an aerodynamic advantage over spoked wheelssince the lack of spokes reduces wind resistance. 35). In 1997, Brunswick announced that it was purchasing MongooseBicycles from Bell Sports Corporation, a move which gave Brunswick a largepresence in the BMX bicycle market and access to the independent bicycledealer distribution channel (Roadmasters are sold through discount and massmerchandiser retailers) (Tiernan, 1997, p. Shaw, D. In addition to BMWdealerships, Montague's bicycles are sold through 5 dealers in the UnitedStates and abroad with the international market representing a significantportion (more than 75 percent) of the company's sales in recent years, astrategy which the company is committed to continuing (McCabe, 1996,p. Cannondale pedals its way to thetop. The Economist, p. M. Some of theelectric bicycles are also sold through automotive dealerships lacking amore formal distribution network of their own. Recent Consumer Characteristics Within the United States, bicyclists can be broken into two majorcategories: commuters and recreational users; recreational riders arefurther classified as enthusiasts, moving up, casuals and infrequentriders. Knight-Ridder/Tribune Business News, p. There is also a growingtrend toward reducing the intimidation that many consumers report atsmaller bicycle dealers and emphasizing the full-service (both before andafter the sale) that consumers cannot realize at discount stores or massmerchandisers. 4. Knight-Ridder/Tribune Business News, p. Companies in various countries can be affected not only by demandin other nations, but also by government practices which seek to limit, orcontrol, access to markets for various products. Its products weresold through independent retailers, and the company commanded as much as a25 percent market share when it produced as many as one million units peryear, which it achieved in several consecutive years during the height ofits popularity (Jesitus, 1996, p. The bicycling industry isa multi-billion dollar industry with global participants and globalmarkets. The averageincome for bicycle commuters who work full-time is $24, , well below theaverage of $29, for all commuters. 1 ). China accused of dumpingbicycles in US. Younger Vietnamese view the Chinesebicycles as a status symbol, but an even more sought after status symbol isa motorcycle, which is the preferred transportation option for traditionalVietnamese bicycle purchasers. 4 3B 992. MachineDesign, p. Bikes to Prague. This strategy posed a problemfor the company when it sought to enter the Japanese market in 1991 andMitsubishi refused to enter into a joint venture with Cannondale since theAmerican company would not alter its traditional distribution strategy.Cannondale sells directly to Japanese retailers where the strategy hasproven effective: five percent of the company's 1994 sales came fromJapan, and the company saw a 5 percent increase in Japanese sales from1993 to 1994. Industry Week, p. Future Market Size Demand for mountain bikes is not expected to continue the dramaticgrowth that it saw in the late 198 s and early 199 s. This category of riderdoes not make the ultimate purchase decision, but may have considerableinfluence over the actual purchaser (typically parents) and can be heavilyinfluenced by peer pressure and advertising as to brand preference.Bicycle manufacturers are eager to tap into the children's market in hopesthat children will mature into consumers with a strong brand loyalty to aparticular manufacturer, and many manufacturers of BMX bicycles alsosponsor BMX teams and competitions to maintain brand awareness and buildbrand loyalty. Knight-Ridder/Tribune Business News, p. Kaufman, S. Unlike public transportation, owners of bicycles do notdepend on a pre-set schedule, and they have the freedom to go where theyneed rather than traveling along a predefined route. Knight-Ridder/Tribune Business News, p.6 4 57. 74). Among American manufacturers, Cannondale is one of the few companieswhich does not use distributors to move its product to retail stores.Cannondale instead sells directly to the retailers, a strategy which itbelieves keeps it closer to its end user. Other consumer purchase bicycles for leisure activities, includingexercise and racing, while still others purchase the bicycles as basictransportation for their children. However, the American government is likely to continue to exercisetrade sanctions in the form of tariffs and other measures in order todiscourage dumping and piracy of other American products. The dependence ofthe bicycle industry on suppliers such as Shimano is made clear in thedetails of the recall: more than 49 manufacturers use Shimano cranks, andShimano dominates the market. Asian manufacturers are also participating in the international marketwith imports from Asia to the United States accounting for 46 percent ofthe American market in 1995; imports from China accounted for 23.7 percentof the American market in 1995, an increase of 14.6 percent from 1993.This has benefited consumers as some bicycles have sold for as little as$79, a decrease of between $1 and $2 over 1994. 7 3 111. Thisrepresents a significant opportunity for bicycle manufacturers, who areotherwise participating in a mature market without significant productinnovations ahead. This strategy enables bicycledealers to realize economies of scale and quantity discount as they carryhundreds of bicycles rather than a smaller selection, and enables consumersto compare a $1 bike with more expensive models at a single locationrather than having to shop multiple bike stores. Wheels of change in bicycle retailing. (1996, September 17). 4 -42. As a result, theVietnamese bicycle industry suffered. Chinese manufacturers have made strong inroads into the Americanmarket by selling products at lower prices than American manufacturers.The American government has taken a strong interest in this practice, whichAmerican manufacturers characterize as "dumping" (selling products in theUnited States for less than they are sold in China), and tariffs have beenthreatened on goods if the practice is not halted. Technological innovations also occur in the components which go intobicycles, and one company has been built based on the toe clips which holda rider's foot to the bicycle. 7 9DCW 7. Thesite is now used to obtain information about customers and their bicycleneeds; that information is used to make decisions regarding productdevelopment. Mercedes-Benz and BMW have participatedin this practice which has benefits to the manufacturers and the brandcompany alike. In 1996, Brunswick purchased theassets of Roadmaster Industries' bicycle business, the nation's second-largest bicycle manufacturer within the United States at the time of theacquisition. The Japanese bicycle market has considerabledomestic competition, including the Nishiki brand, but American units aredoing well in the region and are expected to continue this performance. Most bicycle dealerships(more than 85 percent) are single-location operations, but recent yearshave seen an increase in the number of bicycle chains across the country.Manufacturers in the United States do not sell directly to consumers, butinstead use retailers to reach users. Montaguemanufactures its products in Taiwan, although it is based in Cambridge,Massachusetts with a distribution center in Seattle. Recreational ridersare overwhelmingly white, with only four percent black and two percentAsian or Hispanic. These bicycles madetheir debut in the mid-199 s and offer an inexpensive and pollution-freemeans of commuting. Existing competitors who retain their independence are also likely toface additional challenges as the market slows its growth. Eckert, T. Steel alloys have recently been introduced which weigh aslittle as three pounds for the frame, and which use tubes half as thick asin previous steel alloy versions ("From Carrier Decks," 1995, p. Specialized saw declining sales in1996 over 1995, to $16 million, but that five percent decline was wellbelow the market's 14 percent decline overall. CycleMagic of Indianapolis has addressed this problem by inventing a toe clipthat releases with a twist of the foot. Future Distribution Strategy Companies which are manufacturing "branded" bicycles for othernonbicycle companies (such as the Harley-Davidson bike and the BMW bike)are using the automotive dealerships to reach customers. Future Technological Developments Recognizing the importance of producing bicycles which continue tooffer technological improvements but which remain affordable, Owens Corningsponsored a design competition in 1996 which required that participantsdesign bicycles with significant technological innovations which could beproduced for less than $1 . 22-28. In addition to BMW bicycles, Chryslerhas entered into a licensing agreement with Ross to manufacture threemodels of Jeep branded bicycles retailing from between $2 and $6 each.Porsche Cars is importing its European mountain bicycles to the UnitedStates, and Mercedes-Benz is marketing an all-terrain bicycle with discbrakes. Future Cultural Issues The Clean Air Act and ISTEA are likely to continue to build demand forbicycle commuting within the United States which, in turn, should help keepdemand steady for bicycles as a whole and mountain bikes in particular.The Clean Air Act should also encourage the use and development of electricbicycles since these products do not contribute to air pollution and can berecharged easily during the course of a workday making them attractivealternatives to traditional modes of transportation (including cars andpublic transportation). 9A. Mountain bike makers expect sales assport makes Olympic debut. Indianapolis Business Journal, p. The World Wide Web is likely to be an increasingly important marketingchannel for bicycle manufacturers and retailers. These bicycles are built for rugged use and freestyle riding.Manufacturers of BMX bicycles, including GT Bicycles in California, alsosponsor BMX teams and races in order to promote their product lines andmaintain their market share. 5 8 7 ). 4 Larson, J. 4 ). Today's bicycles are likely to be mountain(all-terrain) bicycles, BMX, or road bikes, each of which addresses aparticular market. 45). These measurescould pose difficulties for American manufacturers trying to make inroadsin the Chinese bicycle market, but may serve to protect those companies'market share within the United States by increasing the effective pricethat consumers will pay for Chinese-made bicycles (Dunne & Walker, 1995, p.4). In addition, the company is able to realize higher profitson its Japanese sales than on American sales since it does not have thedistribution costs that its competitors do, but is able to charge pricesthat are in-line with other Japanese products (Boroughs, 1994, p. As that nation continues tosee economic expansion at a time when many other nations are not seeinggrowth nearly as robust, it is likely that the nation will be an attractivemarket for a number of international bicycle companies. Mountain bike sales peak after fiveyears of dramatic growth. Inc., p. They are also timed to allow bicyclists to cross safely, andnotices sent out in utility bills explain how riders should approachintersections in order to trigger the signals. The company did notenter the mountain bike market during its early stages and therefore lost aprime marketing opportunity to build brand recognition and loyalty. Thecity's intersections have through lanes for bicycles and traffic signalsare designed with extra sensitive devices which can sense a bicycle'spresence. GT wasnot successful at overtaking Cannondale, and even GT's own initial publicoffering (in October 1995) was preceded by weeks by Cannondale's publicoffering. Titanium frames (along with graphite and metalmatrix composite tubes) have become popular for racing bikes since theyoffer lightweight construction, but many riders find that they wear tooquickly and require replacement or refurbishment too often to beeconomical. The Clean Air Act sets standards for air quality and requires somemetropolitan areas to develop methods to reach compliance; among acceptablestrategies are taking steps to make bicycling a viable transportationalternative. However, since they aredifficult to steer, they cannot be used as front wheels. These bikes are lighter thantheir mountain bike counterparts, and are intended for use on pavedroadways. Some manufacturers haveeliminated the use of distributors and sell directly to retailers, butthese companies remain in the minority of the industry as a whole, althoughthe practice has spread to other countries, including Japan, in recentyears as manufacturers have sought to gain closer relationships with theirretailers. Theyhave a median age of 35 (as opposed to a general adult population medianage of 4 ), and are evenly split along gender lines. (1997, July 9).PR Newswire, p. References Barrier, M. American products are particularly popular inJapan, and innovations in terms of the electric bicycle might well bringabout new developments that offer additional opportunities for bicyclemanufacturers. 2-3. Major participantsin the bicycle market, such as Trek, can increase brand awareness throughthe use of licensing agreements with clothing manufacturers to create andsell this type of product at traditional bicycle outlets. However, it isdifficult to remove the foot from the clips quickly, which can increase therisk and severity of injury when bicycles and their riders fall. These consumers are likely to be important incoming years as they increase their purchasing power and bring their uniqueneeds and tastes to the bicycle industry, particularly with regard to high-end products (Underwood, 1996, p. The mountain bicycle was initially introduced in the mid-198 s and amillion units were sold in the United States in 1985; by 1994, demand hadincreased to more than 8.7 million units. The pedalcrank connects the pedal to the frame of the bicycle and, if the crankbreaks, can injure a rider's leg or cause the rider to lose control of thebicycle. (1995, April 6). More than 8 percent of bicycle commuters are men, andapproximately 7 percent are between the ages of 15 and 34. As babyboomers age and the number of children decreases, there is likely to besome downturn in this market, however since the number of children perhousehold is decreasing. 24). (1994, January 1 ). Ritchey Design, adesigner and manufacturer of mountain bike components, first gained a Webpresence in 1995, but used the site primarily as a way to disseminateinformation on the company's competitive mountain bike team (consideredworld class) and to pass along information where Ritchey products could bepurchased. In a marketing move similarto that of Montague at the 1996 Atlanta Olympics, Trek has joined withVolkswagen to market its Y Bikes (which retail for $3, ) in conjunctionwith the automaker's Jetta models. Future Legal Environment The legal environment surrounding bicycles is not likely to changesignificantly over the next five to ten years, although the issue ofwhether the Chinese "dump" bicycles in the lucrative American market islikely to continue to be an area of controversy between the two nations.China itself represents an attractive market for American and Europeanbicycle manufacturers, and there have already been agreements betweenmanufacturers from outside China and the Chinese government to bring aboutthe manufacture and sale of bicycles in China. (1996, July 3). This provides thewheel with less wind resistance than the disk wheel, but with the handlingof the traditional spoked wheel, enabling it to be used in the front ofracing bicycles. CPSC, Shimano announce recall of bicycle components. The bicycle market. (1995, April 21). Units which are purchased through discount stores areoften repaired by the independent bicycle shop, and there is also a movetoward making the occasional bicycle consumer more comfortable in thesespecialty stores in order to boost future sales. Schafer, S. McEvoy, C. ISTEA offers an even greater incentive for bicycling since itrequires states and communities to develop transportation facilities andplans that include nonmotorized travel. Theserepresent a significant marketing opportunity for the company withoutrequiring additional investment in the bicycle market. Overall demand for bicycles wasestimated at 16 million units during the mid-199 s within the United Stateswhere growth was stagnant. 76). Advertising Age, pp. At this point however, specialty bicycle dealers are stillperceived by many consumers to focus on high-end luxury bicycles which arenot appropriate for children or casual consumers (Barrier, 1996, p. These consumers also influence the purchasing behavior of other,less knowledgeable riders who seek out their advice when making purchases.Enthusiasts regularly spend upwards of $9 for their bicycles whilecasuals spend slightly more than $35 and Infrequents spend approximately$2 (Larson, 1995, p. These commuters also tend to be found in areas with goodweather year-round (Larson, 1995, p. Most recreational riders live in the Midwest (31percent) with the remainder of recreational riders spread evenly across theNortheast, West and South (Larson, 1995, p. California high-end bicycle firmsteers back onto profitable course. 4 3B 992). 44). Overview of Industry It is estimated that bicycles are the primary mode of transportationfor more than one-half the world's population ("World Bikes," 1996, p. Israel Business Today, p. Dunne, N., & Walker, T. (1996, July 1). However, this competitive advantage comes at a significant cost,with three-spoked wheels selling for an average of $4 for a front wheeland $5 for a rear wheel (Shaw, 1996, p. Mountain bicycles, also called all-terrain bicycles, have uprighthandlebars and wide tires that are well-suited for off-road cycling. 6 4 57). However, as larger bicycle manufacturerstook notice of the wide acceptance of the Stumpjumper, they entered whatthey perceived to be a growing market. Sporting Goods Business, p. Cannondale is a publicly held companywhich manufactures approximately 25 , bicycles at two plants inPennsylvania. tariff targets listed for Chinapiracy sanctions. Manyconsumers find that all-terrain bicycles are more comfortable to ride thanroad bikes, even when riding in flat areas or good weather (McCabe, 1996,p. Bicycle manufacturers are likely to continue to forge alliances withother brands in order to capitalize on the desires among bicycle consumersto have name luxury brand bicycles. Cannondale's products sell for $45 for the most basic modeland move upwards to a high end of $49 for a racing model. Golfen, B. Despite the increase in the number of automobiles throughout the worldand the greater flexibility that automobiles offer in terms oftransportation choices, the bicycle remains a popular choices for commutersas well as recreational users. 2). The promotion is popular with Trekretailers since consumers must pick up their bicycle at the retail storeswhere they can be sold additional Trek accessories, including clothing andhelmets (Underwood, 1996, p. This research examinesthe international bicycling industry with a particular focus on the all-terrain (mountain) bicycle. 53). This trend in marketing is expected to continue as other companiesform alliances which bring together bicycle manufacturers and the owners ofrecognized luxury name brands. From carrier decks to off-road biking. News & World Report, pp. Bicycles in the United States are typically sold by discount stores orindependent bicycle dealers, but the independent shops are not usuallyaffiliated with a national or even regional chain, although that trend isslowly changing. 42-48. Recent Technological Developments Weight and wind resistance are primary considerations for racingbikes, and innovations in recent years have focused on reducing both onthese high-ticket machines. Emert, C. Introduction The bicycle is one of the most universal modes of transportation inthe world today. 76. Mountain and road bicycles are typically not marketedto those under 18 years of age, while few adults are the primary riders ofBMX bicycles (although they are the purchasers of these items). Brandweek, pp. Basic transportation bicycles can be purchased atdiscount stores in the United States for approximately $1 , but highlyspecialized competition bikes, including mountain bikes, can run into thethousands of dollars. Analysts expect thatthis market niche has reached a mature phase which will be characterized bysmaller growth, particularly at the lower end of the product spectrum.From this standpoint, all-terrain bicycle sales are not expected to accountfor much more than 6 percent of all bicycle sales, which are also expectedto level out after the dramatic growth seen earlier in the decade (McEvoy,1995, p. U. EC has a dream for transportation.Oil and Gas Journal, p. Whitesides, J. In fact, accessories such as clothing and helmets are becoming popularitems for bicycle manufacturers who are capitalizing on a trend which othermajor manufacturers (including Philip Morris) have already followed. (1997, April 3). Approximately 4 percentof recreational riders have college degrees compared with 2 percent ofAmerican adults as a whole, and 35 percent of recreational riders live inhouseholds with annual incomes of more than $5 , , compared with 24percent of all American households. There will continue to be an ongoing demand for bicyclesas transportation, and the electric bicycle may well make inroads in thisareas, as well. The European Community (EC) through its European Transport Commissionis working to reverse the trend of more and larger automobiles in Europe.Just as the Clean Air Act and similar legislation in the United Statesseeks to reduce air pollution and traffic congestion, the EC is working todevelop legislation which sets out similar goals for member nations. (1995, April 7). Bicycle chains have yet to achieve the national presence that theircounterparts in office supplies or home construction and repair have, butthere is evidence that there is a growing trend toward the medium-sizedbicycle retailer with multiple locations. Industry Week,pp. (1997, May 21). In the international market, demand for bicycles as a whole isexpected to level off, but demand for all-terrain bicycles is likely tocontinue to increase for the next several years, with Americanmanufacturers expected to see continued increase in the popularity of theirproducts. 1 . If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.