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The assumptions of industry structure and pricing are based on the market shares of the leading competitors in the motorcycle market including Harley-Davidson with 65% and Honda with 12.9%. There are over 40 different manufacturers of motorcycles globally who comprise the remaining 22% of the worldwide market (Murphy, 2008). Gaining distribution for a new motorcycle model will be challenging given the concentration level of competitors in the market. As motorcycles are considered discretionary purchases, they are influenced by the consumer sentiment index, the level of per capita disposable income, the downstream demand for motorcycle dealership and repair, and the available time consumers have for using them (Diamond, 2008). All of these factors are taken into account in the factoring of both the baseline motorcycle industry forecast and the hybrid motorcycle forecast as well.
Sales and Unit Forecasts
Using exponential smoothing and an average sale price of $9,100, the forecast for the Carolina Swagster hybrid motorcycle has been completed. In 2011, it is projected there will be 6,544 total units that comprise the total available market of hybrid motorcycles, worth $59M in sales. The market will grow to 7.41 units in 2012, achieving a revenue level of $64M. In 2013, the total available market will drop in size slightly to 6,842 units and $62M in revenue. Based on the broader motorcycle market being influenced by broader economic factors, 2014 is expected to be lower in demand,...
By 2015, the market will need innovation to continue to drive its growth, as the total market will be 5,605 units and total available market revenue will be $51M. Table 1, Market Analysis and Forecasts of the U.S. Motorcycle Market, provides an overview of these figures.
Table 1: Market Analysis and Forecasts of the U.S. Motorcycle Market
As Harley-Davidson and Honda dominate the market, leaving 40 other vendors compete for 22% of total sales, the odds of a new vendor gaining market share with a hybrid-based motorcycle will most likely yield 1% market share in the first year, followed by 5% in year 4 and 7% in 5. This would equate to 654 units in 2011, 704 in 2012, 684 in 2013, and 234 units in 2014 and 392 units in 2015. These forecasts show that distribution is critical for the success of the product and gaining dealers and distributors quickly is essential to gain market share.
References
Diamond, D.. (2008). Managing Incentives for Green Vehicles. Public Manager, 37(4), 15-18.
Lapide, L.. (2009). History of Demand-Driven Forecasting. The Journal of Business Forecasting, 28(2), 18-19.
Patrick Mahoney. (2007, March). Taking the roar out of the crowd: HYBRID MOTORCYCLES. Machine Design, 79(5), 98-100.
Murphy, R., Graber, M., & Stewart, a.. (2010). Green Marketing: A Study of the Impact of Green Marketing on Consumer Behavior in a Period of Recession. The Business Review, Cambridge, 16(1), 134-140.
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