Reference no: EM13780317

Is There a Trek Bicycle for Everybody?

Trek Bicycle, founded in 1976, gets a marketing boost whenever high-profile professional racers speed off on their Trek bikes or world-class cyclist’s power through dirt-bike races. Based in Waterloo, Wisconsin, Trek is North America's largest bicycle manufacturer, with more than $800 million in annual sales and a worldwide network of 1,000 dealers. Knowing it can't be all things to all cyclists, Trek focuses its marketing efforts on satisfying the needs of serious cyclists seeking top-quality, high-performance bicycles for athletic training and competition, recreation, or commuting.

For example, Trek has found that the lifestyles and behaviour of consumers who like mountain biking are distinctly different from those of consumers who ride in city streets. Even among mountain bikers, some consumers prefer to feel the rough terrain under their wheels, while others want a smoother ride. Similarly, some urban riders are interested in style, while others care about a bike's environmental impact. Professional athletes want the very best performance, whether they're competing in a fast-paced triathlon or the gruelling Tour de France.

Targeting the segments it can satisfy most effectively, Trek now offers two separate lines of mountain bikes, hard tails for feeling the ride and full-suspension for comfort. For urban riders, it markets seven models of pedal-power bikes and five bikes equipped with electric motors. For consumers who wheel around on bike paths or take a spin on city streets, Trek offers a wide variety of options, including one tandem model. The company's triathlon bicycles are designed with aerodynamics in mind, to help speed cyclists on their way to victory or through a high-powered workout.

Because one size does not fit all cyclists, Trek also designs bikes specifically for women. In addition, customers can design and equip their own bikes online using Trek's Project One configuration tool. To ensure proper fit, customers must visit a local dealer to be measured before their bikes are manufactured and delivered.

Trek's choices of product names reflect the interests of each targeted segment. For example, the Madone product line, for dedicated athletes, is named for Col de la Madone, a French mountain where Lance Armstrong has famously tested his cycling strength.

Some of the commuter models are named after cities where cyclists can be seen pedaling along downtown, such as the Portland (Oregon) and the Soho (New York).

Prices for Trek's high-end Madone models can top $8,000, depending on exact specifications and customizing touches. The urban bikes range in price from $500 to more than $1,000. Many of its children's bicycles are priced above $200. These are wellmade bicycles for people who want advanced engineering, stylish looks, and a great riding experience and are willing to pay for it.

Just as Trek tailors its bikes to the needs of each customer group, it also tailors its promotional efforts. These include targeted advertising, training programs to help cyclists build their skills, and product demonstrations at parks and sporting events. Trek uses Facebook, blogs, Twitter, online videos, and e-mail newsletters to stay in touch with customers, answer questions, and gather feedback.

Supporting charitable groups such as the Lance Armstrong Foundation and the Breast Cancer Research Foundation helps the company show its commitment to social responsibility. Trek also funds Dream Bikes, a non profit organization that recycles used bikes and trains teenagers in repair and retail sales techniques. Dream Bikes asks for donations of bicycles that are unwanted or in disrepair and hires high school students to refurbish and resell the bikes, which are priced for affordability. Currently, Dream Bikes has two stores in Wisconsin, with more in the planning stage.

Trek started with the mission of building the world's best bicycle. Today, it markets the bicycle as a way to be fit, reduce traffic, and makes the world a greener place. Its Eco Design bicycles incorporate environmentally friendly materials and can be disassembled to recycle the parts at the end of their useful lives. The company practices what it preaches about environmental issues, using renewable power to run its manufacturing plant and providing convenient parking for employees who bicycle to work. Green targeting helps Trek attract like-minded customers as well as employees. Employees cycling enthusiasts, like their customers often come up with new product ideas and enjoy testing new products along the way. Where will targeting take Trek next?

Questions for Discussion

1. Is Trek using an undifferentiated, concentrated, or differentiated strategy for targeting? How do you know?

2. Identify the segmentation variables that Trek is applying to consumer markets. What additional variables would you suggest that it apply, and why?

3. If marketers at Trek were trying to determine anticipated sales for a specific period, what method of forecasting would they be using?