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Automated Car Wash System Marketing Plan

Ali El Ahmar

Automated Car Wash System Marketing Plan MM522 Anaheim Keller Graduate School of Management

Ali El Ahmar

Automated Car Wash System Marketing Plan


Ali El Ahmar

2.0 Situation Analysis Car washes have always been an available service for all kinds of people throughout the world. From car enthusiasts to high school and college students and business professionals, everyone seems to want to keep their car in prefect condition, so they tend to seek a car wash to satisfy their needs. With the recent ongoing hard economic times, various businesses have been suffering and were hindered from growth. According to an article from the business journal the author states, After feeding $100 worth of gas into an SUV, motorists are less inclined to dig deeper for a wash. Factor in worries about a credit crunch, declining home equity and higher interest rates, and motorists will wait longer for that car wash (Johnson, 2008). Per the article when tough economic times are lingering, then people tend to sway away from getting a car wash since it is not necessarily a necessity to them. For an already existing family car wash that offers 100% honest and clean hand-wash car service, it has been really tough to attract as well as keep customers. With the addition of an automated car wash system which is simple and fast yet very effective, the family car wash expects to increase their revenue as well by attracting a new customer base as well as maintaining them. Since the economic times are tough, this addition of an automated system will offer high quality service that is affordable and fast. The operation currently offers a service that requires man power to be carried out. The new automated service will be a bit more costly only because the system will not requite any human power to operate. It will be automated yet self serve for the customer at the same time. While adding this new service, the family car wash wants to make sure to maintain the loyalty of existing customers for the hand wash service, as

Automated Car Wash System Marketing Plan


Ali El Ahmar

well as attract a new customer base for the automated system. This will also give each customer an option of which service they would like depending on how fast they need the car to be ready. 2.1 Market Summary The target market for the hand was car service is an already existing base that ranges from car enthusiasts that love to give attention to every single details of their car to high end car owners that also want their car to be taken care of. The new addition of an automated system will target high school and college students, business people, and professionals in the car industry which all do not really have the time of the day to wait for a longer process of the hand wash service. These people want to get in and out as quickly as possible, while at the same time receiving excellent service. The main focus will be saving time and receiving a service that has very competitive prices and is efficient. In the surrounding area, there are a few high schools and colleges within a 20 mile radius which will attract people who want to keep their cars clean from snacks and foods or dirt from various school events such as sports and what not. Market Demographics: The primary target is Irvine, California. A 20-30 mile radius will require services of this car wash. The total population of Irvine is 212,375 (Census 2010) Average household income is $111,455.

2.2 SWOT Analysis

Automated Car Wash System Marketing Plan


Ali El Ahmar

Strengths Company already provides a hand wash car service, which means the background of the owners and employees is very strong and knowledgeable. The location of the car wash which will be in the same vicinity as several high schools and colleges as well as other car shops. Strong knowledge of information systems which will allow integrating easy services all across the automated system. The area where the business is located has many high end car owners due to the socioeconomic status of many of the families and individuals in the area.

Weaknesses Installing the automated system and making it fully self operational will be pricy. Facility is old and may need renovations which will also add to the costs. Struggle to maintain the existing customer base of the hand wash service while adding the automated service. Opportunities Implementing the automated system will ensure faster services which could result into more customers per day going through. Being so close to schools and other car businesses will attract loyal customers. Higher end cars will be serviced due to high income residential areas.

Automated Car Wash System Marketing Plan


Ali El Ahmar

Threats -

Providing deals and coupons in conjunction with other car businesses that are local.

Financial issues that could arise from the implementation of the system which will lead to possible loans owed to the bank.

Tough economic times could slow sales down significantly. New city regulations that will be imposed when building the new automated system could affect the service.

Competitive Matrix
Factor My Company YES 5 YES 4 $7-10 Gas Station Mannys Car Wash NO 3 NO 1 $10-12 Auto Detailing Center NO 3 YES 2 $12-20

Dual Services (Hand/Auto) Number of Bays Waiting area / Free Coffee Attendants Pricing

NO 1 NO 0 $4-6

The following competitive matrix shows the comparison between the family car wash and three other competitors in the same region. As shown in the illustration, my company will offer dual services unlike any other nearby competitor as well as the most number of bays which will allow for a higher volume of cars to go through each day.

2.3 Competition

Automated Car Wash System Marketing Plan


Ali El Ahmar

The current competition does not seem to be very overwhelming since there are only three other car washes that are located within a 30 mile radius of the business, and none of them currently offer both hand service and an automated service at the same time. This will be advantageous to the family car wash since people do not seem to like to travel a long distance in order to get a car wash which actually makes sense especially when gas prices are at an all time high. To distinguish this car wash from the competition, dual services will be offered based on what the customer prefers. The main idea of the marketing plan is to ensure speedy services and excellent customer service to go along with it. The automated system will allow the customer to easily come in and out of the car wash within minutes. The customer does not even have to be outside of the car during the process of the wash in the automated system. With the availability of both services, the family car wash will be able to have a distinctive competitive advantage over other similar businesses. 2.4 Product (Service) Offering Automated car wash This service will be added on to the existing service of a hand wash. This service will provide a self serve automated system that will allow customers to drive through a tunnel, insert their money and drive through the process while the system thoroughly washes their car. The system will be using high pressure guns and foam brushes for the soap application. At the beginning of the service, the customer will make his/her payment and then proceed through the tunnel which will first rinse the car thoroughly and as the belted system moves the car through the tunnel, different washing methods will be applied to the car. The price for the basic automated car wash will be around $7-$10 per customer. Of course, higher end services such as applying wax and detailing will cost a bit more than the basic car wash.
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Automated Car Wash System Marketing Plan


Ali El Ahmar

Customers will have the options of choosing what type of car wash they would like at a kiosk in the front of the tunnel. According to a study published in Professional Detailing Tips, Automatic washes shine in their speed and convenience. Automatic wash simply requires getting into your car and visiting your local car wash, an automatic wash will take only 5-10 minutes to complete, whereas a hand washing, even when rushed, will take between 20 minutes to an hour or more (Tips, 2011). 2.5 Keys to Success The following concepts are keys to success: Customer satisfaction and loyalty. Excellent and fast automated car wash service. Meeting market demand and exceeding competition at all times.

2.6 Critical Analysis Critical issues faced by the family car wash: Maintaining marginal growth for the first six months to a year before considering any price adjustments. Continue to increase customer base and build loyalty. Become the leading car wash service in the region.

3.0 Marketing Strategy The family car wash will introduce a new automated car wash service that has been missed in the local area for some time. In order to introduce the service properly, the company
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Automated Car Wash System Marketing Plan


Ali El Ahmar

will implement an aggressive marketing strategy that will focus on attracting new customers and presenting them with value. The marketing strategy used will have various channels of marketing such as local advertisements, a website, newspaper ads, and other promotions and coupons that will likely attracts the customer. Some of the main points that will be addressed in the marketing strategy are: Attract and maintain loyalty of new customers. Become the only top-quality service in the region. Develop brand equity and maintain a large customer base.

3.1 Mission This family car wash will be providing high quality automated car wash service in addition to the already existing hand car wash service. By doing so, the company wishes to satisfy the needs of many customers who require a speedy and quality service that is priced very reasonably. The company will strive to create value by allowing the customer to choose between the two different services that we provide depending on the customer type. Providing dual services not only will allow the company to become competitive and work its way to become a top brand, but it will also help create value for many customers. 3.2 Marketing Objectives Establish a customer base for the automated service that matches or exceeds the existing one for the hand service. Increase market share every year. Maintain loyalty of customers by keeping an 8% average of repeat customers.
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Automated Car Wash System Marketing Plan


Ali El Ahmar

Seek to develop a brand that is associated with high quality service along with great value for the customer.

3.3 Financial Objectives Increase profit margin by 10-20% with the addition of the new service. Maintain a profit margin that exceeds costs at all times. After three years, attempt to decrease overhead costs. Incrementally increase price after 3-4 years once the service has been fully established. In order to break even in terms of finances, I have calculated a break even analysis as follows: The average set price per car wash is $8.00. Unit contribution equals to $3.00, in which all the variable costs such as manufacturing and servicing are considered and subtracted from our selling price which is $8.00. In order to perform the break even analysis, we take the following formula: BE = Fixed cost / Price Variable Cost (Unit Contribution) which translates into BE = 10,000 / $5.00 =2,000. Our business must sell 2,000 car washes in order to break even. Anything above that level is considered as profits. 3.4 Target Markets The target market for the new automated service will include high school students, local business owners, college students, and business professionals who do not really have the time to obtain a hand car wash service. So, there is going to be a wide variety of customers available to target for the automated service. The main focus will be on targeting customers who want to save

Automated Car Wash System Marketing Plan


Ali El Ahmar

time and still receive the highest value possible in return. There are about 4 different high schools located within the area of the car wash and about 3 elementary schools. This is significant the geographic location of the car wash service will attract the high school students who want to keep their car clean at all times and would like to show it off. On the other hand, parents who are picking up their kids from elementary schools might frequent our car wash to keep their car cleans from after school events and sporting events. Some other available resources will be the many business professionals in the corporate world of Irvine. Irvine is known to be a home to many corporations and therefore there are many busy individuals that will require a quick service. It is important to note that according to the Census, the average median household income in Irvine is $111,455. This stat tells us that the population in Irvine is relatively of the higher end of society which translates into luxury car owners. Luxury car owners want their car to look clean at all times and they are willing to spend top dollar to maintain the clean look. Additionally, there are the local car dealerships and car business owners that want to keep their fleets clean at all times to reflect the image of their company. These are also considered a very good target because they will be looking for fast and cost effective services that they will perform on a regular basis. The following categories sum up the target market: High school and college students in the area that require frequent car washes and are usually tight on money. The Irvine families that hold an average yearly income of $111,000 plus that are willing to pay top dollar for their cars.

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Automated Car Wash System Marketing Plan


Ali El Ahmar

The busy business professionals that require fast service because they are constantly busy throughout the day.

Other local businesses that have car fleets that they would like to maintain at all times. These can potentially become weekly customers or daily.

Target Market Sales Potential

Students Irvine Families Business Professionals Local Businesses

3.5 Positioning The family car wash will position itself as a high-quality dual car wash service that will offer the best of both worlds in the Irvine and Orange County area. We will achieve this position by being highly competitive in the current market. The competitive advantage that the family car wash will have is the availability of dual services unlike any other car wash in the area. This will
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Automated Car Wash System Marketing Plan


Ali El Ahmar

create a large customer base for the company and will maintain customer loyalty based on the customers preference. The operational team comes from a very experienced background as well that is savvy with auto services in general as well as exceptional customer service. 3.6 Strategies The family car wash seeks to establish a premier brand name that provides high quality and continues to grow exponentially in the market. The marketing strategy will create customer attraction and awareness, a new customer base for the automated service, customer loyalty and great value to the customer. The company will distinguish itself by offering both hand and automated car wash services. By doing so, the company will create a lot of traffic on a daily basis. With 5 operating automatic bays, the flow of traffic through the car wash will be simple and fast which allows for more cars to go through per day which in turn creates more revenue. The company will continue to focus on speed and meeting customer demands, By allowing the customer to come in at the time they desire and offering speedy service that is affordable and offers value will create a more personal transaction and relation with the customer. This way the company will present an image that they are not after pure profits, however they care about the customer and the relationship between the customer and the family car wash. The company will seek to invest with local businesses as well to establish a promotional technique that will offer coupons for us and other businesses as well so both could benefit. 3.7 Marketing Mix Pricing The tunnel system that will be implemented is very efficient and profitable. The cost of implementing such a system will be approximately $210,517.14 and it will allow to wash, wax,
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Automated Car Wash System Marketing Plan


Ali El Ahmar

seal, tire shine and dry up to 100 cars per hour (Sonnys, 2011). Prices will vary based on the type of package that the customer wants for the automated system. An all inclusive wash will run about $10 which will include a full wash, wax, seal, tire shine and dry. There will be other basic packages that will offer a basic car wash and dry using soap that will run about $7. The all inclusive car was will be known as the Ultimate Car Wash and the Basic Car Wash. To separate ourselves from the nearest competition, we have kept our prices at $2 under by offering $10 as opposed to $12 at other places. We also plan on implementing packages for loyal customers that will rack up points and receive rewards and discounts based on the points they receive. Promotion The family car wash will work on constantly promoting the services we offer by spreading the word around through various advertisements and word of mouth. We will begin by offering cheap prices and discounts on the opening week of the service to attract the customer and give them a taste of what our service offers. We will also work on cross marketing plans with nearby shops such as Subway, Dairy Queens and PepBoys. Agreements will be made with these shops to distribute cards and discounts for our car wash service. We will also give dealerships an offer where first time buyers will receive a free car wash after a one month period of their purchase. We also plan on hosting a car wash event for high schools and colleges once per quarter to help establish a connection with students. All of these promotional intitiatives will cost a minimal amount, however the potential returns could deem to be very profitable in the long run. Promotional Budget Website Maintenance $50.00

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Automated Car Wash System Marketing Plan


Ali El Ahmar

Promotional Coupons Nearby Businesses Gas Station Public Passes Sales Promotions (Operating Costs) Nearby Businesses Gas Station Giveaways Public (30 cars a months) Local School Events Total Promotional Budget $2880.00 $4,000.00 $13,960.00 $4,500.00 $2,250.00 $200.00 $100.00 $30.00

Distribution Since this is a service and not a product that can be distributed, the family car wash will continually work on distributing promotional items throughout the year. We will also establish an online website where customers can go for more information and pricing. 3.8 Marketing Research

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Automated Car Wash System Marketing Plan


Ali El Ahmar

Market research is essential in order to obtain the ideal customer and begin targeting them. The family car wash will conduct observational research initially where the owners will go out to several car washes and observe what type of customers and cars visit the place and how frequently. All of this data will be recorded and compiled into a report format. Another form of market research will be surveys that the family car wash will conduct. These surveys will be handed out to the target market and then analyzed when returned. With the combination of all of this data, the family car wash will be able to narrow the target market and learn more about the needs and wants of the customer base.

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