Thursday, August 26, 2010

The business plan: geographic market

Frame and Wheel uses the Internet and the Independent Bicycle Store (IBS) channels for distribution. The company positions itself as a "crossover brand" which means that the frame can be obtained either directly from the company and sent to the customers favorite bike shop or through the customer's favorite IBS. The company uses the agency model and takes the view that working with the IBS channel is better for the company, the consumer and the IBS. Frame and Wheel is based in the Northeast and this region apparently represent 40% of the cycling market; although the region will be the company's target market, the company is using the Internet to sell the frames, and this means that the company's reach is global.
Frame and Wheel notes with interest the disclaimers that can be found at the bottom of the websites of some of the IBS that sell bicycles on the Internet. These statements say in effect that if you are outside of the USA you cannot buy the bicycle from an IBS that is selling the bicycle in the USA; you have to buy the bicycle from the dealer in your country or region. Although the big on line bicycle retailers do not require this, the point is that the Internet opens up the global market to consumers and they want to be able to shop in different countries or regions if they choose. Frame and Wheel will not require that a consumer buy the frame from only a dealer in their country or region.

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